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Informist, Friday, Jul. 24, 2026

 

By Avishek Rakshit

 

KOLKATA – The intense summer this year proved to be a boon for Varun Beverages Ltd., as its portfolio comprising aerated soft drinks gained traction. The company, which primarily sells PepsiCo-licensed products in India and parts of Africa, is expected to report a nearly 19% on-year and a whopping 80% on quarter rise in its consolidated net profit for the June quarter at nearly INR 16 billion, according to the average of estimates from 10 brokerages.

 

The highest net profit estimate is INR 16.62 billion from Elara Securities (India) Pvt. Ltd. and the lowest estimate is INR 14.85 billion from Emkay Global Financial Services Ltd. The company's consolidated revenue for the June quarter is expected to rise around 23% on year and nearly 31% on quarter to over INR 86 billion, according to the average of the 10 estimates. The highest revenue estimate is nearly INR 92 billion from 360 ONE Capital Market Pvt. Ltd., and the lowest estimate of nearly INR 84 billion is from Emkay. 

 

The company, which also sells non-carbonated beverages, including packaged drinking water sold under trademarks owned by PepsiCo, will detail its results for the June quarter on Tuesday. 

 

As temperatures across the country soared during the summer, sales of Varun Beverages increased significantly. Nuvama Wealth Management Ltd. expects the company's sales in India to have grown 20% on year, which is expected to lead to 18% revenue growth for the company. 

 

Kotak Securities Ltd. estimates 22.5% volume growth at 477 million cases on a consolidated basis. It includes 19% volume growth in India and high 35% volume growth in the global business, led by a strong performance in South Africa. The high domestic volume growth is partly on account of a low base and a change in its pack size at the wholesale level. The summer last year was weak, and the mercury remained benign, which negatively impacted sales of aerated beverages across the country. 

 

However, the company's sales realisations in India are expected to decline due to upsizing of the wholesale 250 millilitre stock keeping unit to 400 millilitres, brokerage Kotak said. The rupee's depreciation is expected to help the company reap higher revenue from global sales on account of currency conversion rates. The Indian rupee, which lost 7% against the US dollar after the West Asia war broke out, emerged as one of the worst performing emerging market currencies, according to brokerages. 

 

Indian operations comprise around 70% of Varun Beverages' sales volume and global operations account for the remaining 30%. 

 

Varun Beverages is expected to report consolidated earnings before interest, tax, depreciation, and amortisation of INR 24.03 billion for the June quarter, according to the average of estimates from nine brokerages. The highest estimate of INR 24.77 billion is from Elara Securities (India) Pvt. Ltd. and the lowest estimate of INR 22.78 billion is from Emkay.

 

Brokerage Kotak estimates Varun Beverages' consolidated gross margin to decline by 75 basis points on year to 53.8% in the June quarter but expects the EBITDA margin to remain flat on year at 28.5%. 

 

At 1005 IST, shares of Varun Beverages traded 1.6% lower at INR 451.85 on the National Stock Exchange. The shares are down around 10% since the company announced its March quarter earnings in April.

 

Of the nine research reports on the company available with Informist, eight have a 'buy' or equivalent recommendation on the stock at an average target price of INR 598 per share. One brokerage has a 'hold' or equivalent recommendation. 

 

Following are the June quarter earnings estimates for Varun Beverages from 10 brokerages in descending order of the estimate of net profit in INR billion:

 

Brokerage firm	Net sales	Net profit	EBITDA
Elara Securities (India) Pvt Ltd.	86.30	16.62	24.77
Motilal Oswal Financial Services Ltd.	86.31	16.37	24.58
YES Securities (India) Ltd.	84.43	16.36	23.98
Kotak Securities Ltd.	85.63	15.97	24.41
Axis Securities Ltd.	85.15	15.61	24.60
JM Financial Institutional Securities Pvt. Ltd.	85.59	15.54	24.03
Bank of America global research	86.56	15.21	23.58
Nuvama Wealth Management Ltd.	85.61	15.06	23.54
360 ONE Capital Market Pvt Ltd.	91.73	14.90	--
Emkay Global Financial Services Ltd.	83.79	14.85	24.77
Average	86.11	15.65	24.03

 

End
 

US$1 = INR 96.53

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Himanshi Gupta 

 

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