Varun Beverages Soars with Q1 Profit of Rs 726.49 crore, Up 35.22% Year-Over-Year
Varun Beverages, a PepsiCo bottler, witnesses a significant 35.22% increase in Q1 profits for the year 2025, reaching Rs 726.49 crore, primarily due to solid volume expansion.
Tanya Krishna Follow Us PepsiCo bottler Varun Beverages Ltd has announced strong earnings for Q1 of CY2025, nudging a profit of Rs 726.49 crore, marking a whopping 35.22% increase compared to the Rs 537.27 crore from the same period last year. This impressive growth was fueled by high volume growth and a dip in finance costs. The company reported revenue from operations at Rs 5680.03 crore, surging 29.15% as compared to Rs 4397.98 crore from the previous year. The EBITDA stood firm at Rs 1,264 crore, boasting a 27.8% year-over-year (YoY) growth [Source: 1].
Despite Indian EBITDA margins improving by 111 basis points due to increased operational efficiencies and robust volume growth, EBITDA margins slid marginally at the consolidated level, dipping 20 basis points because of the lower profitability in the South Africa market [Source: 3].
Varun Beverages posted a consolidated sales volume growth of 30.1% to 312.4 million cases in Q1 CY2025, up from 240.2 million cases in Q1 CY2024. This surge was propelled by a robust 15.5% organic volume growth in India and inorganic volume contributions from South Africa and the Democratic Republic of Congo [Source: 1]. Net realisation per case edged up by 1.8% in India and stayed flat in international markets (not including South Africa). Total net realization per case, however, slipped 0.9% YoY because of lower realization in own brands in the South African market [Source: 1]. South Africa, which recorded 141 million cases in the trailing four quarters, registered a growth of around 13% over the same period last year [Source: 4].
The contraction in gross margins, reported at 54.6%, was due to a significant decline of 171 basis points, mostly attributed to South Africa's lower margin profile and the higher mix of carbonated soft drinks (CSD) in India. CSD constituted 75% of the total sales in Q1CY25, with non-carbonated beverages (NCB) accounting for 7% and packaged drinking water contributing 18%. The mix of low-sugar/no-sugar products accounted for approximately 59% of the consolidated sales volumes [Source: 1].
Ravi Jaipuria, Chairperson of Varun Beverages Limited, said, "We're delighted to present a robust operational and financial performance in the first quarter of CY2025. Our consolidated sales volumes increased by an impressive 30.1% YoY, with healthy organic growth of 15.5% in India. The integration of the South Africa territory has progressed well, with a focus on strengthening ground infrastructure, streamlining operations, and enhancing execution across the market." He further added, "We report strong sales numbers in South Africa over the trailing four quarters, marking a growth of approximately 13% over the same period last year. Although net realizations in South Africa historically remain lower due to the higher mix of own brands, we are proactively working to actively support improvements in realizations and margins moving forward" [Source: 4].
The company board recommended a final dividend of Rs 0.50 per equity share of face value ₹2 each for the year ended on 31st December 2024, which was approved by the shareholders at the Annual General Meeting held on 3rd April 2025 and subsequently paid in April 2025. In accordance with the guidelines in the company's dividend policy, the board has approved an interim dividend of 25% of the face value, amounting to Rs 0.50 per share [Source: 4].
So here's to Varun Beverages, powering ahead and keeping the good times flowing!
Sources:[1] BloombergQuint[2] Economic Times[3] Money Control[4] Zee Business
Stay tuned for more updates on Varun Beverages and the PepsiCo bottler's exciting journey!
- The strong earnings for Q1 of CY2025 reported by Varun Beverages, a PepsiCo bottler, have boosted their profit to Rs 726.49 crore.
- This growth in Q1CY2025 represents a significant 35.22% increase compared to the previous year's Q1 earnings of Rs 537.27 crore.
- Varun Beverages' impressive growth is attributed to high volume growth and reduced finance costs.
- The company's revenue from operations for Q1CY2025 reached Rs 5680.03 crore, an increase of 29.15% as compared to the previous year.
- Varun Beverages has recommended a final dividend of Rs 0.50 per equity share for the year ended on 31st December 2024, which was approved by shareholders at the Annual General Meeting held on 3rd April 2025.
- Investors interested in the food-and-drink industry may find Varun Beverages an appealing addition to their portfolio, as they continue to show consistent earnings growth.
- Ravi Jaipuria, Chairperson of Varun Beverages Limited, expressed satisfaction with the company's Q1CY2025 performance, citing a 30.1% increase in consolidated sales volumes.
- Varun Beverages' focus on improving ground infrastructure, streamlining operations, and enhancing execution in the South African market may help boost net realizations and margins in the future.
