Varun Beverages Limited profit rises 13.5% on revenue growth

Varun Beverages Limited reported consolidated net profit of Rs 830.59 crore for the quarter ended 30 September 2026, up 13.5% year on year, as revenue from operations increased 33.3% to Rs 6,815.59 crore. VBL’s total expenses rose 35.8% to Rs 5,880.55 crore, exceeding revenue growth.

How did VBL perform in the September 2026 quarter?

VBL’s consolidated net profit after tax increased to Rs 830.59 crore in the three months ended 30 September 2026 from Rs 731.51 crore in the corresponding 2025 quarter. Profit before tax rose to Rs 1,052.62 crore from Rs 927.23 crore, while basic earnings per share increased to Rs 2.45 from Rs 2.15. The results were unaudited and approved by the board on 30 October 2026.

Revenue from operations rose by Rs 1,703.15 crore to Rs 6,815.59 crore from Rs 5,112.44 crore a year earlier. Total income increased to Rs 6,935.45 crore from Rs 5,260.00 crore, although other income declined to Rs 119.86 crore from Rs 147.56 crore. The increase in total income was therefore driven by revenue from operations.

Why did VBL’s profit rise more slowly than revenue?

VBL’s profit increased more slowly because total expenses grew 35.8%, faster than its 33.3% increase in revenue from operations in the September 2026 quarter. Expenses rose by Rs 1,549.46 crore to Rs 5,880.55 crore. Calculated as a share of operating revenue, total expenses were 86.3%, compared with 84.7% in the September 2025 quarter.

Cost of materials consumed, the largest expense line, increased 50.2% to Rs 2,909.62 crore from Rs 1,937.42 crore. Other expenses rose 35.1% to Rs 1,478.92 crore, depreciation and amortisation increased 34.5% to Rs 419.98 crore, and excise duty rose 37.1% to Rs 208.03 crore. Employee benefits expense increased 6.8% to Rs 602.56 crore.

Finance costs rose 53.5% to Rs 71.69 crore from Rs 46.71 crore, while purchases of stock-in-trade increased to Rs 100.64 crore from Rs 88.91 crore. The inventory-change charge declined to Rs 89.11 crore from Rs 134.95 crore. VBL also recorded a Rs 2.28 crore share of loss from associates and joint ventures, compared with Rs 1.68 crore a year earlier.

How did VBL’s nine-month results compare with last year?

VBL reported nine-month consolidated net profit of Rs 3,202.30 crore for the period ended 30 September 2026, up 15.5% from Rs 2,772.12 crore in the restated prior-year period. Revenue from operations increased 23.6% to Rs 22,371.24 crore from Rs 18,101.12 crore, while basic earnings per share rose to Rs 9.43 from Rs 8.15.

Nine-month total expenses rose 25.0% to Rs 18,469.18 crore from Rs 14,729.86 crore, exceeding the rate of revenue growth. Cost of materials consumed increased 30.4% to Rs 9,840.18 crore, while profit before tax increased 15.1% to Rs 4,160.62 crore. Calculated net profit margin was 14.3% of revenue, compared with 15.3% in the comparable 2025 period.

The September quarter was below the preceding June 2026 quarter, when VBL reported revenue from operations of Rs 8,744.74 crore and net profit of Rs 1,509.67 crore. September-quarter revenue was 22.1% lower sequentially and net profit was 45.0% lower. VBL states that sales of its products are seasonal but does not identify a specific cause for the sequential movement.

What business changes affected VBL’s reported results?

VBL restated comparative figures after VBL Industries (Kenya) Limited acquired a business from Devyani Food Industries (Kenya) Limited for Rs 305 crore, effective 1 August 2026. The transaction qualified as a common-control business combination and was accounted for using the pooling-of-interests method. The prior reporting periods were restated as if the combination had occurred from the beginning of the earliest period presented.

During the nine months ended 30 September 2026, VBL’s South African subsidiary, The Beverage Company Proprietary Limited, acquired all the share capital of Twizza Proprietary Limited. Twizza’s consolidation was provisional under Indian Accounting Standard 103, Business Combinations. On 2 July 2026, the boards of Bevco and Twizza approved Twizza’s merger into Bevco with effect from 1 August 2026, after which Twizza ceased to be a step-down subsidiary.

VBL also incorporated KIVA Spirits and Company Limited as a wholly owned Indian subsidiary during the September quarter to undertake ready-to-drink alcoholic beverages and allied products. Its Zimbabwe subsidiary incorporated Varun Beverages Holding (Zimbabwe) (Private) Limited as an investment-holding vehicle. A separate Zimbabwe subsidiary entered an exclusive Mondelez South Africa distribution agreement effective 1 October 2026 for chocolate, biscuit, candy and gum products in Zimbabwe.

What did VBL announce for shareholders and unresolved matters?

VBL approved a third interim dividend of 50 paisa per equity share of face value Rs 2 for financial year 2026. The dividend applies to 338,24,94,644 issued, subscribed and paid-up shares. The record date is 5 November 2026, and payment is scheduled to begin from 7 November 2026 for eligible shareholders.

The proposed acquisition of all the equity of Crickley Dairy Proprietary Limited in South Africa remains unresolved. VBL’s subsidiary entered the agreement on 17 March 2026 to diversify into categories including value-added dairy-based beverages, but certain conditions precedent were not fulfilled. The sellers referred the matter to the Arbitration Foundation of Southern Africa during the quarter ended 30 September 2026.

Conclusion

VBL’s September-quarter figures show revenue growing faster than earnings: operating revenue rose 33.3% to Rs 6,815.59 crore while net profit increased 13.5% to Rs 830.59 crore. The difference reflected a 35.8% rise in total expenses, led by a 50.2% increase in material consumption, and the nine-month pattern was similar.

Next, the disclosed dates to watch are the 5 November 2026 record date and dividend payments beginning 7 November 2026. VBL’s reported base will also reflect the Kenya business combination effective 1 August 2026 and the Twizza transaction, while the Crickley matter remains in arbitration following the 17 March 2026 agreement.