Transcript of Investors & Analysts Conference Call

August 4, 2026 National Stock Exchange of India Ltd. BSE Limited Exchange Plaza, Block G, C/1, Bandra Kurla Phiroze Jeejeebhoy Towers Complex, Bandra (E), Mumbai – 400 051 Dalal Street, Mumbai – 400 001 Email: cmlist@nse.co.in Email: corp.relations@bseindia.com Symbol: VBL Security Code: 540180 Sub: Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: Transcript of Investors & Analysts Conference Call Dear Sir/Madam, Transcript of Investors & Analysts Conference Call held on July 28, 2026 i.e. post declaration of Unaudited Financial Results of the Company for the Quarter and Half Year ended June 30, 2026 is enclosed. The same is also being uploaded on website of the Company at www.varunbeverages.com. You are requested to take the above on record. Yours faithfully, For Varun Beverages Limited Ravi Batra Chief Risk Officer & Group Company Secretary Encl.: As above Varun Beverages Limited Q2 & H1 CY2026 Earnings Conference Call Transcript July 28, 2026 Moderator: Ladies and gentlemen, good day and welcome to the Varun Beverages Limited earnings conference call. I now hand the conference over to Mr. Anoop Poojari from CDR India. Thank you, and over to you, sir. Anoop Poojari: Thank you. Good afternoon, everyone and thank you for joining us on Varun Beverages’ Q2 CY2026 earnings conference call. We have with us Mr. Ravi Jaipuria, Chairman of the company, Mr. Varun Jaipuria, Executive Vice Chairman and Whole- Time Director, and Mr. Raj Gandhi, President and Whole-Time Director of the company. We will initiate the call with opening remarks from the management, following which we will have the forum open for a question-and-answer session. Before we begin, I would like to point out that some statements made in today's call may be forward- looking in nature and a disclaimer to this effect has been included in the results presentation shared with you earlier. I would now request Mr. Ravi Jaipuria to make his opening remarks. Ravi Jaipuria: Good afternoon, everyone and thank you for joining us on our earnings conference call. I hope you have had a chance to review our results presentation for the second quarter and half yearly ended June 30th, 2026. We are pleased to report a strong performance during this quarter across our markets. Consolidated sales volume grew by 19.8% and, together with improved realizations translated into a 20.4% increase in net revenue from operations. EBITDA increased by 17.2% to Rs. 23,430.4 million in Q2 2026. Page 1 of 13 In India, we saw healthy volume growth in twenties since the onset of the season, i.e. from March onwards except for the month of April, which was about flat, resulting in overall volume growth for the quarter of 14.4%. Our expanded manufacturing footprint, extensive distribution network, and continued investments in chilling infrastructure continued to drive growth. We also extended our exclusive bottling and trademark license agreement with PepsiCo in India until April 2049 and removed the earlier restrictions requiring VBL to operate solely as the SPV for PepsiCo business, strengthening our long-term partnership and creating greater operational flexibility to pursue opportunities that can deliver scale and synergies. We also entered a strategic alliance with Asahi Group Holdings to introduce the iconic CALPIS brand in India, marking our entry into the value-added fermented dairy beverage category. The international business maintained strong momentum. Twizza in South Africa helped overcome capacity constraints while strengthening our manufacturing footprint and route-to-market capabilities in South Africa. We also entered into an agreement to acquire the business of Devyani Food Industries (Kenya) Limited, which will provide us with the ready GTM in Kenya for expansion into carbonated soft drinks and energy drinks. In accordance with our dividend policy, the Board of Directors has approved an interim dividend of 25% of face value, i.e., Rs. 0.50 per share, resulting in total cash outflow of ~Rs. 1,691 million. Looking ahead, we remain confident in the long-term growth potential across our markets, supported by favorable demographics, rising disposable incomes, and increasing consumption of packaged beverages. With adequate capacities, a growing and diversified portfolio, strong partnerships, and an extensive distribution network, we are well-positioned to deliver sustained and profitable growth and create long-term value for all our stakeholders. I would now like to invite Mr. Gandhi to share the key highlights of our operational and financial performance. Thank you. Raj Gandhi: Thank you, Mr. Chairman. Good afternoon, and a warm welcome to everyone joining us today. Let me provide an overview of the financial performance for the second quarter and half year ended 30th June 2026. Page 2 of 13 Revenue from operations net of excise and GST stood at Rs. 84,512.3 million in Q2 of 2026, up 20.4% year-on-year. For H1 2026, revenue increased by 19.4% to Rs. 150,254.2 million. Growth during the quarter was primarily supported by 19.8% increase in consolidated sales volume to the level of 466.7 million cases. As mentioned by Chairman, in India, we saw healthy volume growth in twenties since the onset of the season, with the exception of April. International markets also delivered a healthy growth with volumes increasing by 38.4% including the contribution of 11.8 million cases from Twizza in South Africa. Net realization per case for beverages at the consolidated level improved by 1.2% supported by better realizations in international territories. Gross margin improved by 44 basis points year-on-year to 55% supported by a higher mix of international business. In India, early stocking of key raw materials and savings in sugar consumption driven by a higher mix of low-sugar, no-sugar products helped maintain gross margins despite the inflationary raw material environment affected by West Asia crisis. EBITDA stood at Rs. 23,430.4 million, registering growth of 17.2% year-on-year with the EBITDA margin at 27.7% in Q2 of 2026. EBITDA margin declined by 76 basis points year-on-year primarily due to consolidation of Twizza business which currently operates at lower margins. In India, the EBITDA margins improved by 38 basis points driven by operational efficiencies arising from healthy volume growth, partially offset by higher other expenses, primarily transportation and distribution costs. PAT grew by 15.1% to the level of Rs. 15,253.6 million, supported by strong volume growth across India and international territories. Depreciation increased by 33.6% due to the commissioning of new plants in India last year, which were not part of the base quarter, and the acquisition of Twizza in South Africa. Finance costs increased by 55.8% primarily on account of Twizza acquisition. For H1 2026, EBITDA increased by 18.7% to the level of Rs. 38,719.6 million, while PAT grew by 16.9% to the level of Rs. 24,040.7 million. Low-sugar, no-sugar products contributed approximately 73% of the consolidated volume during the period. VBL India remains net debt-free with surplus cash of ~Rs. 14,941 million. At the consolidated level, net debt stood at ~Rs. 3,730 million as of 30th June 2026. This was primarily on account of acquisition of Twizza in South Africa. Company's long- term rating for its bank loan facilities has been reaffirmed by CRISIL at AAA stable. Page 3 of 13 During H1 2026, net capitalized capex amounted to ~Rs. 9,500 million. This included ~Rs. 2,000 million towards brownfield expansion in India including value-added dairy beverages line at Supa, ~Rs. 1,000 million towards snack manufacturing plant in Zimbabwe, and ~Rs. 4,000 million towards market infrastructure including visi- coolers, glass bottles, pallets, and vehicles, etcetera. The balance was attributable to foreign exchange fluctuations. As on 30th June 2026, capital work-in-progress stood at the level of ~Rs. 4,900 million, pri [Showing first 8,000 characters — download PDF for full document]