Varun Beverages shares rise 2% on Q1 beat; Brokerages raise target prices

Varun Beverages share price today

A stronger-than-expected March quarter, coupled with the management’s focus on international expansion and margin protection, has prompted analysts to maintain their bullish outlook on Varun Beverages stock.

VBL’s commentary on margin outlook, they said, is “assuring” as the company has mitigated geopolitical and input cost risks by maintaining high inventory levels. Besides, the company remains focused on driving growth, led by continued expansion of its distribution network, augmenting international portfolio, and new product launches back home. 

All of this encouraged brokerages to raise their share price targets and earnings estimates on Varun Beverages. 

On the BSE, Varun Beverages share price gained 1.8 per cent to ₹529 per share. By comparison, the benchmark Sensex index was down 0.06 per cent at 9:20 AM.

Varun Beverages Q1-CY26 results: Profit, revenue, margins explained

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  Varun Beverages, which follows calendar year, reported a consolidated revenue of ₹6,570 crore in the March quarter (Q1) of CY-2026, clocking a growth of 18.1 per cent year-on-year (Y-o-Y). 
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  The company’s consolidated volume grew by 16.3 per cent Y-o-Y to 363 million cases, led by 14.4 per cent growth in India volumes and 21.9 per cent Y-o-Y improvement in international volumes. 
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  Varun Beverages said its consolidated realisation per case came at ₹174.1, rising 1.6 per cent on year, supported by better realisation in International business (up ~9 per cent). 
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  While International business realisation was supported by favourable currency movement, realisation in the Domestic business was down 1.5 per cent (versus -4.1 per cent in Q4CY25), mainly due to product upsizing.  
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  Decline in India realization was contained due to lower discounting and premiumisation of the product portfolio, the management said. 
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  Varun Beverages’ consolidated net profit came at ₹872.4 crore.  
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  Consolidated gross margin expanded by ~60 basis points Y-o-Y, while Ebitda margin rose 55 bps to 23.3 per cent.

Varun Beverages: Management commentary

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  VBL’s management remains bullish on domestic demand with no expected adverse impact from inflation.  
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  Strong traction in new launches such as Nimbooz and Tropicana, along with the anticipated El Niño-led heatwave, it said, is expected to boost beverage consumption and support a strong near-term outlook. 
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  Addressing packaging related concerns due to aluminum shortage, the company said aluminum can beverage sales are less than 2 per cent of total sales. Further, the packaging inventory is covered until next quarter for the domestic market and until the next two quarters for international markets.  
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  Though the shortage of aluminum cans is affecting the energy drinks portfolio, due to which the company is shifting to PET bottles.

Varun Beverages growth outlook: Brokerage views, new target prices

Emkay Global Financial Services | Buy | Target raised to ₹620 (from ₹540)

With a favourable climate so far, the management said growth trends are even better in Q2CY26 (so far). Emkay Global noted that VBL is also better placed in terms of margin (compared to peers), with strategic stocking of PET and lower discounting in a strong demand environment.

“The only headwind is an increase in gasoline cost, which might raise logistics cost in coming quarters,” it said.

Nonetheless, VBL’s ahead-of-the-curve investment in distribution/capacity expansion (up ~50 per cent) is a key competitive edge when the global supply chain is encountering disruption.

The brokerage has raised revenue estimates for CY26 by 6.5 per cent, for CY27 by 7.5 per cent, and for CY28 by 7.7 per cent.

Further, Ebitda estimates have been raised by 6.6 per cent/7.4 per cent/7.9 per cent, net profit estimates are up by 4.9 per cent/5.1 per cent/6.5 per cent for the respective years. 

Motilal Oswal Financial Services | Buy | Target raised to ₹ 600

VBL consummated the acquisition of Twizza, strengthening, its manufacturing footprint. It also acquired Crickley Dairy through BevCo at an enterprise value of of ₹131.46 crore, further strengthening its presence in South Africa.

“We expect VBL to witness improved earnings momentum, aided by an extreme heatwave expected this year due to El Niño conditions (to aid in peak season demand); 2) a scale-up in the international market, driven by South Africa and recovery in the Zimbabwe market; 3) strengthening of on-ground execution in the Indian market; 4) scale-up of the snacking business, backed by the operationalization of the Morocco and Zimbabwe markets in H2CY25; and 5) an expanding product portfolio,” it said.

MOFSL expects a CAGR of 16 per cent/16 per cent/20 per cen in revenue/Ebitda/PAT over CY25-27. It has increased CY26 and CY27 earnings estimates by 4 per cent and 6 per cent, respectively. 

Elara Capital | Buy | Target price increased to ₹560 (from ₹535)

VBL’s recently launched ‘Adrenaline Rush’ is seeing good traction. Besides, the newly launched Sting classic (Gold & Black) is doing well. The dairy portfolio and Tropicana grew 60 per cent and 100 per cent, respectively, during the quarter. 

VBL expects to add 0.5 million outlets in CY26, compared to historical trend of 0.3-0.4 million store additions every year.