Business · Companies · 2 hrs ago
Varun Beverages’ Q3 volumes rose 28.7% as packaging costs squeezed margins
Varun Beverages’ sales volumes rose 28.7% in the September quarter, its third quarter of 2026.
The Indian company bottles PepsiCo drinks and recorded growth in both India and international markets.
Higher packaging costs cut its gross margin to 53.1%, down 3.34 percentage points from a year earlier.
Revenue rose 33.2% to ₹6,607 crore, but profit growth was held back by higher costs and financing expenses.
The company expects margins to stabilize if input prices do not rise further or other economic conditions worsen.
It has not raised prices across its carbonated drinks, but reduced the size of Sting bottles from 300 ml to 250 ml.
Varun plans to expand distribution and capacity in 2027, while analysts have raised concerns about the investment costs and uncertain returns from newer businesses.
Varun Beverages’ consolidated volumes rose 28.7% year on year to 354.4 million cases in the September quarter of 2026.
Revenue increased 33.2% to ₹6,607 crore, but higher packaging costs compressed gross margin by 334 basis points to 53.1%.
India volumes grew 22.5%, while international volumes rose 39.9%.
The company said it expects gross margins to stabilize if input-price trends hold and there are no further adverse macroeconomic developments.
Varun Beverages has not raised prices across its carbonated soft drinks portfolio, but reduced the size of Sting bottles from 300 ml to 250 ml.
- Who
- Varun Beverages Ltd, a PepsiCo bottler.
- What
- Q3CY26 volumes rose 28.7% year on year, while higher packaging costs squeezed margins.
- When
- The September quarter of 2026.
- Where
- India and the company’s international markets.
- Why
- Volume growth was driven by India’s growth and international markets, while packaging costs rose amid geopolitical disruptions.
This story does not have two clearly opposing sides.
A weak summer coincided with the expansion of Campa Cola, complicating assessments of weather and competition.
India volume growth was 14.4%.
Consolidated volume grew 28.7% year on year to 354.4 million cases.
Jefferies India said India’s volume-growth momentum continued.
- Q3CY26 volume
- 354.4 million cases, up 28.7% year on year
- India volume growth
- 22.5%
- International volume growth
- 39.9%
- Q3CY26 revenue
- ₹6,607 crore, up 33.2% year on year
- Gross margin
- 53.1%, down 334 basis points year on year
- Sting bottle size
- Reduced from 300 ml to 250 ml