The PepsiCo bottling partner reported June-quarter earnings on Tuesday, July 28, that missed Street estimates. Consolidated revenue rose 20.4% year-on-year to ₹8,451.2 crore, compared with analysts’ estimate of ₹8,565 crore.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) increased 17.2% to ₹2,343 crore against a poll of ₹2,415 crore, while margin narrowed to 27.7% from 28.5% a year ago and came in below the expected 28.2%. Net profit rose 15.1% to ₹1,525.3 crore, also missing the consensus estimate of ₹1,570 crore.
Domestic volumes grew 14.4% during the quarter, lower than market expectations of around 20%, as unseasonal rains impacted demand in April.
Addressing concerns over competition from Reliance-backed Campa Cola’s ₹10 offerings, Executive Vice Chairman Varun Jaipuria said the company is not looking to significantly expand in the entry-price segment as long as it continues to deliver healthy double-digit growth.
“We have not scaled up ₹10 significantly. As long as we’re delivering 20%-plus growth in most of our markets, we’re pretty happy with those growths. The ₹10 segment is a non-profitable category for us,” Jaipuria said, adding that the company is seeing growth of over 20% in most months after April.
Chairman Ravi Jaipuria said Campa’s growth may also be aided by geographic expansion and the recruitment of new consumers into the category, while Varun Beverages believes it is also benefiting from consumers shifting away from smaller regional brands.
Management attributed the weaker April performance to adverse weather conditions, saying the changing seasonality due to the El Niño effect had affected beverage consumption. It added that July has continued to witness healthy demand momentum.
On profitability, the company said it remains comfortable with its margin outlook despite higher raw material and freight costs stemming from geopolitical disruptions. Chairman Ravi Jaipuria said a portion of the higher input costs has already been absorbed in the second quarter through average-cost inventory accounting, with adequate inventory secured for the third quarter.
The company also highlighted strong traction in its non-carbonated portfolio. Management said value-added dairy beverages are growing at over 40%, while Nimbooz has recorded growth of more than 30%. Overall, low- and no-sugar products accounted for around 73% of consolidated sales volumes during the quarter.
On the energy drinks segment, management said the recent regulatory clarification around the use of the word “energy” had led to a temporary slowdown in demand. However, volumes have started recovering after revised product labels were rolled out, with some demand shifting temporarily to carbonated soft drinks during the transition.
The company also said it is currently focused on rolling out CALPIS in India under its recently announced partnership with Japan’s Asahi Group Holdings and is not evaluating any expansion of that partnership into other beverage categories at this stage.
Shares of the company ended 7.5% lower at ₹429.50 following the earnings result announcement. The stock has declined about 13% so far in 2026.
