Varun Beverages Limited (VBL), one of the largest PepsiCo franchisees globally, reported a strong set of numbers for the first quarter of calendar year 2025 (Q1 CY2025). The company’s performance was fuelled by robust volume growth, enhanced operational efficiency, and lower finance costs in India.
Revenue from operations rose 28.9% year-on-year to ₹5,566.9 crore in Q1 CY2025, compared to ₹4,317.3 crore in Q1 CY2024. This was driven by a 30.1% growth in consolidated sales volumes, reaching 312.4 million cases. The growth included organic volume growth of 15.5% in India and contributions from recently integrated operations in South Africa and DRC.
Net profit (PAT) stood at ₹731.4 crore, registering a 33.5% increase from ₹547.9 crore in Q1 CY2024. The rise in profit was supported by higher volumes and a reduction in finance costs due to the repayment of Indian debt via QIP proceeds, which also resulted in interest income of ₹10.8 crore during the quarter.
EBITDA increased by 27.8% YoY to ₹1,263.9 crore, broadly in line with revenue growth. However, consolidated EBITDA margin declined slightly by 20 basis points, impacted by the lower-margin profile of South African operations. On the other hand, India EBITDA margin improved by 111 bps, supported by strong volume-led operating leverage.
Gross margin for Q1 CY2025 was 54.6%, down 171 basis points year-on-year, affected by a higher mix of carbonated soft drinks (CSD) in India and lower realization in South Africa. Notably, low/no-sugar beverages made up ~59% of total volumes during the quarter.
Key operational developments – Q1 CY2025:
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New production units were commissioned in Kangra (Himachal Pradesh) and Prayagraj (Uttar Pradesh).
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Additional greenfield plants in Bihar and Meghalaya are on track to begin operations in the 2025 season.
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Backward integration facilities were established at Prayagraj and DRC plants to strengthen supply chain efficiency.
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From February 1, 2025, VBL’s subsidiaries began distributing PepsiCo’s snack products in Zimbabwe and Zambia.
Dividend and credit update:
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An interim dividend of ₹0.50 per share (25% of face value) has been declared for CY2025, amounting to a total payout of ₹169.1 crore.
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CRISIL upgraded VBL’s long-term credit rating to AAA/Stable, highlighting the company’s strong financial and operational fundamentals.
Chairman’s statement:
Mr. Ravi Jaipuria, Chairman, Varun Beverages Limited, said: “We are pleased with the strong start to CY2025. Our new capacities and deeper market presence across India and international territories are driving growth. Expanding into the snack food segment in Africa enhances our portfolio strategy. We remain confident in sustaining this momentum and unlocking further value in the beverage ecosystem.”
