Summary:
Varun Beverages reported 33.2% revenue growth in Q3CY26, supported by 28.7% higher beverage volumes. However, rising packaging costs compressed gross and EBITDA margins, while net profit grew 13.5%. Shares declined 5.5% as investors assessed profitability concerns.
Varun Beverages (NSE: VBL) reported strong sales growth in Q3CY26, but the quarterly performance was affected by increasing packaging costs and shrinking margins. Beverage volumes were up 28.7% while revenues were up 33.2%. The stock was down 5.5% on October 30, 2026, as investors focused on weaker profitability.
Varun Beverages Q3CY26 Results: Revenue Growth At 33.2%
PepsiCo’s major bottling partner reported consolidated revenue from operations at ₹6,607.56 crore in Q3CY26 against ₹4,960.69 crore a year ago.
Net profit rose 13.5% YoY to ₹830.59 crore and EBITDA increased 25.1% to ₹1,426.71 crore.
Revenue growth was much faster than profits, indicating the pressure on operating margins.
| Financial Metric | Q3CY26 | YoY Growth |
| Revenue | ₹6,607.56 crore | +33.2% |
| Net profit | ₹830.59 crore | +13.5% |
| EBITDA | ₹1,426.71 crore | +25.1% |
| Consolidated volume | 35.44 crore cases | +28.7% |
| Gross margin | 53.1% | -334 bps |
| EBITDA margin | 21.6% | -140 bps |
The company runs its financial year from January to December so the September quarter is its third quarter.
India's Volume Growth Hits 22.5%, Global Sales Up 39.9%
Sales volumes were also a big positive.
Consolidated beverage volumes rose to 35.44 crore cases from 27.53 crore cases in Q3CY25.
Favorable weather, wider distribution and higher demand drove a 22.5% volume growth in India.
International markets contributed stronger growth of 39.9% including the company’s South African operations.
The average beverage realization per case was up 2.2% YoY and domestic realization was up 0.5% aided by premium products and selective reduction in trade discounts.
Carbonated soft drinks accounted for 73.3% of the volumes, followed by packaged drinking water (21.9%) and juice-based drinks (4.8%).
Why Are Varun Beverages Margins Shrinking?
Higher costs for packaging were the biggest worry.
Prices of packaging materials such as plastic preforms, shrink films, closures and aluminum cans went up amid global supply disruptions.
Therefore, the gross margin declined 334 basis points to 53.1%.
Despite the increased volume and improved operating efficiency, the EBITDA margin dropped 140 basis points to 21.6%.
Sugar prices also jumped by about 16 percent. But the company’s move into low-sugar and zero-sugar drinks helped to offset much of this pressure.
Products accounted for 88% of India’s volumes in Q3CY26, up from 44% in the year-ago period.
Varun Beverages’ Shares Fall 5.5% After Q3 Results
Varun Beverages shares fell 5.5% to ₹392 on October 30 from the previous close of ₹414.80.
The stock touched an intraday low of ₹389.65 and traded about 1.37 crore shares, which is about 2.6 times its 30-session average volume.
The decline came as concerns grew that higher costs were eating up much of the benefits from stronger sales.
The company also declared a third interim dividend of ₹0.50 per share and set November 5, 2026 as the record date.
Varun Beverages continues to benefit from expanding distribution, international operations and improving demand for beverages. But it will need to be able to recover packaging costs, improve pricing and restore margins to sustain earnings growth.
The key thing for investors to watch is the difference between rising volumes and real profit growth.
