Varun Beverages shares drop 3% as analysts flag competition as key risk
Varun Beverages posted a 33 per cent growth in the consolidated net profit at ₹260 crore for the quarter ended December 2025
 "Varun Beverages shares drop 3% as analysts flag competition as key risk")
Shares of Varun Beverages Ltd. continued to face selling pressure on Wednesday as analysts flagged competitive intensity in the sector as a key risk, after the company reported its December-quarter earnings for the financial year 2026 (Q4-FY26).
The beverage company's stock fell as much as 2.89 per cent during the day to ₹438.05 per share, a day after it fell over 5 per cent. The stock pared losses to trade 2 per cent lower at ₹442 apiece, compared to a 0.12 per cent advance in Nifty 50 as of 10:20 AM.
Shares of the company fell for the fourth straight session and currently trade at 5 times the average 30-day trading volume, according to Bloomberg. The counter has fallen 9 per cent this year, compared to a 1.4 per cent decline in the benchmark Nifty 50. Varun Beverages has a total market capitalisation of ₹1.49 trillion.
Varun Beverages Q3 results
Varun Beverages posted a 33 per cent growth in the consolidated net profit at ₹260 crore for the quarter ended December 2025, when compared with ₹195.64 crore reported in the quarter ended December 2024.
The company's total income grew by 14.8 per cent year-on-year (Y-o-Y) to ₹4,433.90 crore in Q4CY25 from ₹3,862.25 crore in Q3CY24. Earnings before interest tax depreciation and amortization (Ebitda) increased by 10.2 per cent Y-o-Y to ₹639 crore from ₹580 crore.
The company said profit growth was also supported by lower finance costs and higher other income, including interest income on deposits and favourable currency movements in international markets.
Analysts on Varun Beverages earnings
ICICI Securities flagged risks to volume momentum and margins due to intensifying competition, noting India's margins of 26 per cent versus guidance of 21-22 per cent. While international volumes grew 10 per cent year-on-year (Y-o-Y) and remain strong, ICICI reiterated a 'Hold' rating amid rising competitive intensity.
"With management guiding for double-digit volume growth in CY26, aided by favourable weather conditions and the possibility of El Nino, we expect VBL to benefit from operating leverage, although competitive intensity and execution remain crucial," ICICI said.
Adverse season and irrational competitive activity in India business remain a key risk for the company, analysts at JM Financial said. It expects margins to improve in calendar year 2026 (CY26) on better volumes, utilisation and fixed-cost absorption. However, it cut earnings estimates by 3-4 per cent for CY 2026 and 2027 due to lower India realisations, maintaining a 'Buy' with a revised target price of ₹550.
Antique Stock Broking said management expects performance to improve in CY2026, aided by a lower base and a better summer season, with guidance for double-digit volume and value growth. It maintained its 'Buy' rating with a revised target price of ₹610.
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