Varun Beverages Ltd

Indian subsidiary

• Board approves incorporation of wholly-owned Indian subsidiary for RTD and alcoholic beverages, subject to approvals.
• Mr. Prathmesh Mishra appointed CEO & MD of the subsidiary.
• Proposed authorized share capital Rs 10 crore; paid-up equity Rs 9 crore; 100% held by Varun Beverages.

Tunisia joint venture

• Board approves incorporation of Varun Beverages Tunisia SA for beverages production and distribution.
• Ownership: Varun Beverages India 75%, Bevanda Tunisia 25%.
• Cash consideration; total share capital TND 9 million.
• Face value of shares TND 10 per share.
• Regulatory approvals: RNE required.

Regulatory & meeting updates

• Meeting held on Aug 25, 2026, 4:00–4:13 PM; approvals subject to requisite clearances.
• Disclosures filed detailing subsidiary and JV; approvals pending for MCA and RNE.

Subsidiary deconsolidation

• Twizza merged with Bevco, ceasing Twizza as a step-down subsidiary of Varun Beverages.
• Completion confirmed today at 06:59 PM IST, subject to applicable South African laws.
• Earlier disclosure dated July 2, 2026 noted board approvals for the merger.

ESG rating update

• NSE Sustainability Ratings & Analytics Limited assigned ESG Rating 63 for FY2026.
• Rating was 62 for FY2025; confirmation received today at 3:54 PM.
• Rating update posted on Varun Beverages' website.

Meeting Details

• Date of Meeting: August 17, 2026.
• Location: Mumbai.
• Mode: Group investor meeting at Motilal Oswal 22nd Annual Global Investor Conference 2026.

Participants

• Management participants: company executives to attend.

Purpose

• Purpose: investor meeting participation with investors.

Additional Notes

• No unpublished price sensitive information proposed to be shared.

Meeting Details

• Date: July 28, 2026; post-unaudited Q2/H1 CY2026 results.
• Event: Investors & Analysts Conference Call; mode not specified; audio recording available.
• Purpose: discuss unaudited quarterly results and investor interaction.
• Organizer: Varun Beverages Limited.
• Availability: audio recording linked on company website.

Record date and dividend details

• 2nd interim dividend of ₹0.50 per equity share for FY2026.
• Record date fixed Aug 1, 2026 for entitlement.
• Dividend payment from Aug 4, 2026 to registered shareholders.
• Equity shares: nominal value ₹2.
• Total issued/subscribed/paid-up equity shares: 338,24,64,894.

Financial highlights

• Q2 2026 revenue from operations: Rs 84,512.3 million, up 20.4% YoY.
• Q2 2026 consolidated sales volume: 466.7 million cases, +19.8% YoY.
• Gross margin: 55.0% in Q2 2026, up 44 bps.
• EBITDA: Rs 23,430.4 million, up 17.2% YoY.
• EBITDA margin: 27.7% in Q2 2026, down 76 bps due to Twizza.
• PAT Q2 2026: Rs 15,253.6 million, +15.1% YoY.
• H1 2026 revenue: Rs 150,254.2 million, up 19.4% YoY.
• H1 EBITDA: Rs 38,719.6 million, up 18.7% YoY.
• H1 PAT: Rs 24,040.7 million, +16.9% YoY.
• Low sugar/no sugar mix ~73% of H1 volumes.

Strategic actions and acquisitions

• Extended PepsiCo India exclusive bottling and trademark license to 2049; SPV restriction removed.
• Asahi CALPIS franchise in India; planned Original and Mango variants.
• Entered DFIKL Kenya acquisition for USD 32 million.
• DFIKL Kenya net revenue > Rs 3,000 million; GTM infrastructure in place.
• Twizza acquisition in South Africa; expands manufacturing footprint and distribution.

Dividend and capital allocation

• Interim dividend 25% of face value Rs 0.50 per share; cash outflow ~ Rs 1,691 million.

Outlook and operations

• Long-term growth potential across markets; favorable demographics and rising incomes.
• Expanded manufacturing footprint and distribution network; investments in chilling infrastructure.

Business overview

• Global beverage player; second-largest PepsiCo franchisee outside the US across 10 countries.
• India is largest market, contributing ~67% of net revenues in FY2025.

Operational highlights

• Q2 CY2026 consolidated volume 466.7 mn cases; up 19.8% YoY; India +14.4%, International +38.4%.
• Twizza acquisition in SA adds 11.8 mn international cases in quarter.
• Net revenue from operations up 20.4% to Rs84,512.3 mn.
• EBITDA Rs23,430.4 mn; +17.2%; margin 27.7% (down 76 bps due to Twizza).
• PAT Rs15,253.6 mn; +15.1% YoY.
• Gross margins 55.0%; +44 bps; higher international mix.
• Interim dividend Rs0.50 per share (25% of face value); cash outflow ~ Rs1,691 mn.
• Extended EBA with PepsiCo India to Apr 30, 2049.
• CALPIS franchise with Asahi to launch in India.
• Kenya DFIKL acquisition for USD 32 mn; GTM in place.
• DFIKL has net revenue over Rs3,000 mn for FY2026; GTM in place.

Financial performance

• Q2 CY2026 net revenue Rs84,512.3 mn; 20.4% YoY.
• Q2 PAT Rs15,253.6 mn; +15.1% YoY.
• Q2 EBITDA Rs23,430.4 mn; margin 27.7%; YoY growth 17.2%.
• H1 CY2026 revenue Rs150,254.2 mn; YoY 19.4%; PAT Rs31,403.7 mn.
• Gross margins 55.0%; YoY margin gain despite inflation.

Capital structure & liquidity

• Consolidated net debt Rs3,730 mn as at 30 Jun 2026.
• VBL India net debt-free with ~Rs14,941 mn cash.
• CRISIL AAA/Stable long-term rating reaffirmed.
• Net capex in H1 CY2026 ~ Rs9,500 mn; India Rs2,000 mn; Zimbabwe Rs1,000 mn; market infra Rs4,000 mn.
• CWIP ~ Rs4,900 mn for SA expansion and Kenya CSD line.

Strategic priorities & outlook

• Expand international footprint; leverage PepsiCo alliance and new brands.
• CALPIS launch in India via Asahi franchise.
• Kenya GTM via DFIKL; accelerate East Africa expansion.
• Twizza integration strengthens SA capacity and route-to-market.
• Low/no sugar mix reached ~73% of volumes in H1 2026.

Risks & mitigation

• Reliance on PepsiCo licensing; EBA extension critical for continuity.
• Integration risk from Twizza and DFIKL acquisitions.
• Raw material inflation; mitigated by efficiencies and cost management.
• Logistics costs pressure; addressed by distribution optimization.

Governance & leadership

• Board approved interim dividend of Rs0.50 per share (25%).
• CRISIL AAA/Stable rating reaffirmed.
• Forward-looking statements cautions included; no governance changes disclosed.

Financial results and dividend

• Unaudited consolidated and standalone results for quarter and half-year ended 30 June 2026 approved.
• Limited review reports by OP Bagla & Co. LLP and J C Bhalla & Co. issued with unmodified opinion.
• Second interim dividend of ₹0.50 per equity share approved.
• Record date fixed at 1 August 2026; payment from 4 August 2026.
• Calendar year financial year (Jan-Dec) approved by Company Law Board.

Strategic actions and investments

• Bevco acquired 100% Twizza (SA) for ZAR 2,053m; consolidation provisional from 18 Mar 2026.
• Twizza became step-down subsidiary from 18 March 2026.
• Merger of Twizza with Bevco approved; ownership unchanged.
• Bevco to acquire Crickley Dairy SA for ZAR 238.00m; completion by 30 Sep 2026.
• Bevco subscribed 29.99% in FPEL HR2 Energy Private Limited for INR 15.84m.
• Acquired 23% more in Jager Renewables Two; total holding 49%.
• EBA with PepsiCo extended to 30 Apr 2049; SPV restriction removed.
• Asahi alliance to launch CALPIS in India via franchise.
• VBL Kenya to acquire DFIL Kenya for USD 32m; completion by 1 Aug 2026.

Audit status and disclosures

• Consolidated and standalone results reviewed by independent auditors; unmodified opinion.
• Some subsidiaries' interim results reviewed by joint auditors; disclosures in Annexure.
• The results are based on a limited review; not a full audit.

Senior Management Appointments

• Appointment of Sarabjeet Singh Gujral as CHRO, July 20, 2026; 19+ years HR, ex-HCCB & DCM Shriram, full-time.
• Appointment of Srinivasan Sourirajan as Chief Manufacturing Officer, July 20, 2026; 30+ years FMCG, ex-Pernod Ricard, full-time.