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Varun Beverages shares rebound after Q2 results disappointment
The bottler said India monthly volume growth stayed above 20% through peak summer, while El Niño-linked April volumes weighed on the quarter.
Varun Beverages shares rose about 4% on Wednesday after falling more than 7% the prior session following mixed June-quarter results that included weaker-than-expected India volume growth, according to LiveMint Markets. The company is a PepsiCo franchise bottler and follows a January to December financial year, with analysts pointing to results that led to earnings downgrades for 2026 and 2027.
In the India business, volume growth came in at 14.4%, below expectations of around 20% due to a low base. LiveMint Markets reported that adverse weather tied to El Niño affected volumes in April, contributing to the underperformance.
The company offset softness at home with stronger international demand, where volumes rose 38.4%. Consolidated volume increased 19.8% to 466.7 million cases, while revenue grew 20% to Rs 8,451 crore in Q2.
Despite the rebound in volumes, sentiment was dampened by a drop in consolidated EBITDA margin of 76 basis points to 27.7%. LiveMint Markets said the margin pressure reflected consolidation of the lower-margin Twizza business, higher staff costs, and increased depreciation tied to commissioning of new operations, while management reiterated confidence in delivering double-digit India volume growth for the full year.