Varun Beverages

“We are already at about 4.2 million as per our last read, which is there. And we are hoping to add a couple of 100,000 outlets every year.”

“Yes, Latika, as far as 2026 is concerned, the capex is already over.”

“And as far as India is concerned, the total capex, including one greenfield plant at Suratgarh, Rajasthan for Visi-coolers and one PET line.”

“See, we are doing very well in Africa, in most of the places we are out of capacity. We are investing in capex in Morocco now because we do not have enough capacity there. We are investing in Zimbabwe since we do not have capacity. In DRC, we are putting a line up as well.”

“And there, we are already running our plants at full speed. And Morocco, where the season was in August where the capacity is short. And hopefully, before the next season, we will have enough capacity installed at all locations.”

“As far as South Africa is concerned, with the Twizza acquisition, we have enough capacity. And we do not think we will face a shortage this year. The only little bit of a gap was found in Zimbabwe, where Zambia had overcapacity, and we will be supporting Zimbabwe from there from this month itself.”

“And for next year, we are anyway adding more capacity in Zimbabwe as well.”

“Yes, this will definitely go up. The next plant will be operational in 1 or 2 quarters, and this number will definitely go up.”

“So, Sting is coming back. The volumes are looking promising, and it is building back.”

“So let us assume the negativity was 25%. Now we can say we are slightly positive.”

“See, the margin is slightly improved because Twizza has the backward integration and we have started similar initiatives in other places as well.”

“See, Latika, like we mentioned earlier, that the Rs. 10 pricing was never part of our larger portfolio play, even in this quarter, our Rs. 10 price point would be 0.2-0.3 percentage to our overall volume.”

“Our endeavor will be to sustain healthy growth over the longer term, supported by effective utilization of our expanded capacities and market infrastructure.”

“Consolidated sales volume revenue grew 28.7% with a volume growth of 22.5% in India and 39.9% in international markets.”

“Now again, the weather has been very good. The price pack is holding up in the market. The growth is back.”

“And even if you see a 9M trend, we are trailing at 16%-17% growth now largely, right, which is a good double-digit growth.”

“Our water growth are better because water is where the most amount of pressure is for B-brands and local players due to the increase in availability and the increase in raw material cost.”

“RTDs, if you see, they are growing at about 13%-15% and we are looking where we can partner up and get into RTDs.”

“Coming to margins, gross margin moderated by 334 basis points year-on-year to 53.1% in Q3 calendar year 2026, primarily due to higher packaging material costs, including preforms, shrink films, closures, cans, arising from geopolitical disruptions.”

“However, packaging cost contributed approximately 300 bps of pressure on gross margin.”

“In addition, sales of non-beverage products such as preforms and caps in India increased by approximately 104% during the quarter. Given their higher COGS, these products had an impact of approximately 100 basis points on gross margin in India.”

“The impact of around a 16% increase in sugar price was largely offset by a higher proportion of low sugar and no sugar products in India with their share increasing from 44% levels in the corresponding Q3 of 2025 to the level of 88% in the Q3 of the 2026 in India, almost double.”

“EBITDA increased by 25.1% year-on-year to the level of Rs. 14,267 million in Q3 CY2026 with EBITDA margin at 21.6%.”

“Depreciation and finance costs increased by 34.5% and 53.5%, respectively, primarily on account of acquisition of Twizza in South Africa and the associated debt funding.”

“With effect from 1st August 2026, the merger of Twizza with BevCo has been completed, and we expect to unlock significant operational synergies in the coming quarters.”

“During the quarter, we have also started beverage operations in Kenya and introduced two new beverage brands, ‘BOLT UP’ and ‘XTREME FIZZ’, marking another step towards strengthening our footprint in the fast-growing African region.”

“We also entered into an exclusive distribution agreement with Mondelez in Zimbabwe, further broadening our product offering in the market.”

“The incorporation of KIVA Spirits and Company Limited marks an important step in exploring opportunities in ready-to-drink beverages, alcoholic beverages and allied products.”

“Mondelez is one of the best brands you can work with. And we are very fortunate to partner up with them. They already have an existing business of about $11 million in Zimbabwe with the local partner they were working with, We are sure he was not able to harness the full potential of the market.”

“In line with our dividend policy, the Board of Directors have approved an interim dividend of 25% of the face value, Rs. 0.50 per share, resulting in total cash outflow of Rs. 1,691 million.”

“But there is conversation if the pricing stays high, do they downsize certain packs, do they take certain pricing up or will there be a trade margin reduction. So we will have to wait and see what happens on that.”

“There is no worry, Vivek. The only thing is last year, local currencies had gone up vis-a-vis dollar. This year, this has stabilized.”

“I am sure you are aware of the whole issue, which happened with FSSAI that they had banned the use of the word energy on labels.”

“Revenue from operations increased by 33.2% year-on-year to Rs. 66,075.6 million, while EBITDA grew 25.1% to Rs. 14,267.1 million.”

“PAT increased by 13.5% year-on-year to the level of Rs. 8,306 million in Q3 CY2026, compared with the Rs. 7,315 million in the corresponding quarter last year.”

“Other income declined by 18.8%, reflecting relatively stable currency movements during the quarter.”

“For 9M CY2026, EBITDA increased by 19.9% to the level of Rs. 52,746 million, while PAT grew up by 15.5% to Rs. 32,023 million.”

“In terms of volume mix, carbonated soft drinks accounted for 73.3%, juice-based drinks for 4.8% and packaged drinking water for 21.9% of total sales volume during the quarter.”