Varun Beverages is expected to report 12% higher revenue for the first quarter, helped by growth in international markets, while margin pressure from input costs and a softer India business may keep profit broadly unchanged.
The quarter points to a gap between sales growth and earnings growth, with revenue expected to rise faster than operating profit. That suggests mix changes and higher costs weighed on profitability even as overseas markets remained supportive. Bloomberg estimates imply a sharper slowdown in margin expansion than in recent quarters, making commentary on costs and demand trends important.
Varun Beverages Q1 Preview - Bloomberg Estimates (Consolidated, YoY)
- Revenue seen 12% higher at Rs 6,238 crore versus Rs 5,567 crore
- Ebitda seen 6% higher at Rs 1,342 crore versus Rs 1,264 crore
- Margin seen at 21.51% versus 22.70%
- Profit seen unchanged at Rs 726 crore
The key issue this quarter is whether Varun Beverages can sustain growth outside India while its core domestic business faces a weaker seasonal setup and pricing pressure. Analysts are also watching if international expansion, including recent acquisitions and distribution moves, can offset slower India momentum and support earnings through 2026.
Here's what analysts expect from Varun Beverages Q1 results
DAM Capital
- Revenue growth may be led by strong Africa performance.
- Early summer onset may have supported demand, but competition remains a key monitorable.
- Recent strategic moves, including the Twizza acquisition and Carlsberg partnership, may aid distribution and overseas growth.
- Gross margin may contract due to higher PET and sugar costs.
- Operating leverage and cost controls may support Ebitda margin.
- Street focus includes 2026 capex, energy drinks, sports drinks and competitive intensity next season.
Nuvama
- India volumes are seen rising 3% YoY, with domestic revenue up 1%.
- India Ebitda margin is expected to decline 100 bps YoY to 23.9%.
- Consolidated revenue is forecast to grow 3%, with volumes up 4%.
- Consolidated Ebitda may rise 1%.
- Gross margin is seen improving, but Ebitda margin may decline 50 bps YoY to 22.2%.
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JM Financial
- Mid-single-digit India sales growth may be driven by high-single-digit volume growth, partly offset by weaker price/mix.
- International sales may rise 25% YoY.
- Lower India profitability and a higher share of international business may limit Ebitda and profit growth.
Morgan Stanley
- Domestic revenue is seen rising 6%.
- International revenue may grow 20%.
- Margin may decline slightly on a yearly basis.
IIFL Capital
- India business may see a weak quarter due to delayed summer onset and a high base.
- India Ebitda is expected to decline 0.6%, with margin down 60 bps YoY.
- Consolidated sales may grow 7%, with Ebitda up 4%.
- International business sales may rise 20%, while international Ebitda may grow 23%.
- Consolidated profit is expected to grow around 5%.
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