Varun Beverages Q1 FY27 profit rises 15.5% as revenue jumps 21%

INDIA – Varun Beverages Ltd (VBL), PepsiCo’s largest bottling partner in India, reported a 15.5% year-on-year increase in consolidated net profit for the first quarter of FY27, supported by strong volume growth across its domestic and international markets, while also confirming it is not pursuing a stake in beer brand Bira 91. 

The company posted a consolidated net profit of Rs 1,521 crore (US$159.08M) for the April-June quarter, compared with Rs 1,317 crore (US$137.75M) in the corresponding period last year. Revenue from operations rose 21% to Rs 8,650 crore (US$904.72M) from Rs 7,163 crore (US$749.19M) in Q1 FY26, reflecting higher beverage sales and continued expansion across key markets. 

Consolidated sales volume increased 19.8% to 466.7 million cases during the quarter, up from 389.7 million cases a year earlier. The growth was driven by a 14.4% increase in India and a 38.4% rise across international markets. 

International volumes included 11.8 million cases contributed by Twizza in South Africa following its acquisition. In India, VBL recorded volume growth in the twenties from March onwards, except for April, which remained broadly flat, resulting in overall quarterly growth of 14.4%. 

Chairman Ravi Jaipuria said the company’s investments in manufacturing and distribution continued to support its performance. “Our expanded manufacturing footprint, extensive distribution network and continued investments in chilling infrastructure continued to drive growth,” he said. 

Jaipuria also confirmed that VBL has extended its exclusive bottling and trademark licence agreement with PepsiCo in India until April 2049.  

He added that the removal of the previous requirement for the company to operate solely as a special purpose vehicle (SPV) for PepsiCo’s business provides greater operational flexibility. 

The company also dismissed reports suggesting it was bidding for a stake in struggling beer maker Bira 91.  

“At the moment, we are still looking at what categories we would expand (into) and are hiring some people to look at new ventures, new possibilities. But it’s too early, since we have just got clearance with Pepsi and we are not looking at Bira,” Jaipuria told analysts during the post-earnings investor call. 

VBL said it has entered a strategic alliance with Asahi Group Holdings to introduce the CALPIS brand in India, marking its entry into the value-added fermented dairy beverage segment. 

“We also entered a strategic alliance with Asahi Group Holdings to introduce the iconic CALPIS brand in India, marking our entry into the value-added fermented dairy beverage category. The international business maintained strong momentum. Twizza, in South Africa, helped overcoming capacity constraints, while strengthening our manufacturing footprint and route-to-market capabilities in South Africa. We also entered into an agreement to acquire the business of Devyani Food Industries (Kenya) Limited, which will provide us with the ready GTM in Kenya for expansion into carbonated soft drinks and energy drinks,” Jaipuria said. 

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