Varun Beverages Ltd reported a 20% year-on-year rise in net profit to ₹878.7 crore for the quarter ended March 31, 2026, supported by strong volume growth across India and international markets.

Revenue from operations grew 18.1% YoY to ₹6,574 crore, while EBITDA increased 21% to ₹1,528.9 crore, with margins expanding to 23.3% from 22.7% a year ago, the company said in its earnings release.

Volume-led growth across markets

The performance was driven by a 16.3% growth in consolidated sales volumes, with India volumes rising 14.4% and international markets growing faster at 21.4%.

“We are pleased to report a strong performance in the first quarter of CY2026, supported by healthy demand, disciplined execution, and continued progress across our markets,” chairman Ravi Jaipuria said.

Net realisations improved modestly at the consolidated level, aided by favourable currency movement in overseas markets, although India saw a slight decline due to volume-led strategies such as pack upsizing and targeted price-point launches.

Margins expand despite cost pressures

Gross margins improved by 62 basis points to 55.2%, supported by early stocking of key raw materials despite an inflationary input cost environment.

EBITDA margin expansion was driven by operating efficiencies, particularly in India, where improved scale and cost controls supported profitability.

However, depreciation rose due to commissioning of new plants over the past year, while finance costs increased following the acquisition of Twizza in South Africa.

Africa expansion gathers pace

During the quarter, the company completed the acquisition of Twizza in South Africa, strengthening its manufacturing footprint in the region.

“We consummated the acquisition of Twizza in South Africa… strengthening our manufacturing footprint and route-to-market capabilities in Africa’s largest soft drinks market,” Jaipuria said.

The company has also entered into an agreement to acquire Crickley Dairy, which will further expand its presence in value-added dairy and juice-based beverages, subject to regulatory approvals.

The board approved an interim dividend of ₹0.50 per equity share of face value ₹2 each, and fixed May 1, 2026 as the record date for determining eligible shareholders.

The shares of Varun Beverages rose 3.24% on Monday to an intraday high of ₹506.35 apiece on the NSE. The company's stock has slipped over 5% during the past year, against the broader Nifty 100 index that hs risen nearly 1% during the same period.