Varun Beverages Ltd (VBL), PepsiCo’s India bottling partner, on Tuesday reported a 15.5% year-on-year (YoY) rise in its consolidated net profit to Rs 1,521 crore for the April-June quarter (Q1FY27) against Rs 1,317 crore profit reported in the corresponding quarter of the previous financial year.
Following the result announcement, shares of the company fell sharply and closed lower by 7.35% to Rs 430.30 a piece on Tuesday. Total revenue from operations rose 21% to Rs 8,650 crore during Q1FY27 from Rs 7,163 crore in the year-ago period.
Varun Beverages also denied bidding for a stake in beer brand Bira 91, stating that it is exploring opportunities in new categories but is not looking at Bira.
“At the moment, we are still looking at what categories we would expand (into) and are hiring some people to look at new ventures, new possibilities. But it's too early, since we have just got clearance with Pepsi and we are not looking at Bira,” Chairman Ravi Jaipuria told analysts during the company's post-earnings investor call.
Bira 91's parent company B9 Beverages, which was among India’s largest homegrown beer brands, faced a massive financial collapse, regulatory disruption from a legal name change, and leadership changes.
The remark by Jaipuria comes after B9 Beverages founder Ankur Jain stepped down from the board and his executive role after signing a settlement with lenders and investors last week. Jain and his family held more than 17% in the company.
VBL’s consolidated sales volume grew by 19.8% to 466.7 million cases in Q1FY27 from 389.7 million cases in Q1FY26, driven by volume growth of 14.4% in India and 38.4% in international territories.
In India, the company saw volume growth in the twenties since the onset of season i.e. from March onwards, except for the month of April, which was about flat resulting in overall volume growth for the quarter of 14.4%. International volumes include 11.8 million cases during the quarter from the acquisition of Twizza in South Africa.
Jaipuria said that their expanded manufacturing footprint, extensive distribution network and continued investments in chilling infrastructure continued to drive growth.
He added that the company has extended its exclusive bottling and trademark licence agreement with PepsiCo in India until April 2049 and removed the earlier restriction requiring VBL to operate solely as an SPV for PepsiCo's business, strengthening the long-term partnership and creating greater operational flexibility to pursue opportunities that can deliver scale and synergies.
“We also entered a strategic alliance with Asahi Group Holdings to introduce the iconic CALPIS brand in India, marking our entry into the value-added fermented dairy beverage category. The international business maintained strong momentum. Twizza, in South Africa, helped overcoming capacity constraints, while strengthening our manufacturing footprint and route-to-market capabilities in South Africa. We also entered into an agreement to acquire the business of Devyani Food Industries (Kenya) Limited, which will provide us with the ready GTM in Kenya for expansion into carbonated soft drinks and energy drinks,” said Jaipuria.
