Varun Beverages’ June Quarter Profit Up by 5%

Gurugram, July 29, 2025 – Varun Beverages Ltd (NSE: VBL, BSE: 540180), one of PepsiCo’s largest global bottlers, reported a resilient performance for the quarter ended June 30, 2025. Despite a 3% year-on-year (YoY) decline in consolidated volumes due to unseasonal rains in India, the company posted a 5.0% YoY increase in profit after tax (PAT) to ₹1,325.5 crore.

Q2CY25 and H1CY25 Financial Highlights

Quarterly Performance: Q2CY25 vs. Q2CY24

• Revenue from Operations declined to ₹70,173.7 million in Q2CY25, down 2.5% from ₹71,968.6 million in Q2CY24.
• Sales Volume dropped by 3.0%, from 401.6 million cases in Q2CY24 to 389.7 million cases in Q2CY25.
• EBITDA rose marginally by 0.4% to ₹19,987.7 million in Q2CY25, compared to ₹19,912.2 million in the same quarter last year.
• Profit After Tax (PAT) increased by 5.0%, reaching ₹13,254.9 million in Q2CY25 versus ₹12,618.3 million in Q2CY24.
• EBITDA Margin improved by 82 basis points (bps), rising from 27.7% in Q2CY24 to 28.5% in Q2CY25.
• Gross Margin remained unchanged at 54.5% year-on-year.

India volumes fell 7.1% due to the early onset of monsoon rains, while international volumes grew 15.1%, with South Africa up 16.1%. Net realisation per case rose 0.5% at the consolidated level, aided by a 6.6% improvement in international markets.

Half-Yearly Performance: H1CY25 vs. H1CY24

• Revenue from Operations rose by 9.3%, reaching ₹125,843.1 million in H1CY25, compared to ₹115,141.8 million in H1CY24.
• EBITDA grew by 9.5% year-on-year, coming in at ₹32,627.4 million in H1CY25, up from ₹29,799.8 million in the corresponding period last year.
• Profit After Tax (PAT) showed a strong increase of 13.6%, rising to ₹20,568.5 million in H1CY25 from ₹18,098.2 million in H1CY24.

Notably, ~55% of the consolidated sales volume in H1CY25 came from low/no added sugar products, signaling increased consumer preference for healthier beverage options.

Key Strategic and Operational Developments

Capacity Expansion in India

During Q2CY25, the company commenced commercial production at four new greenfield facilities:

• Prayagraj (Uttar Pradesh) – 4 CSD lines, 1 JBD line, 1 water line
• Damtal (Himachal Pradesh) – 2 CSD lines, 1 JBD line
• Buxar (Bihar) – 2 CSD lines, 2 JBD lines, 1 water line
• Mendipathar (Meghalaya) – 2 CSD lines, 2 JBD lines

These facilities have added capacity but have yet to contribute incremental volumes.

International Expansion

• PepsiCo Snacks in Morocco: Commercial production of Cheetos began during the quarter via subsidiary Varun Beverages Morocco SA.
• South Africa: A can line was installed at the Durban facility. Land acquisition near the Boksburg unit is pending Competition Commission approval to further enhance backward integration and capacity.
• Zambia: VBL increased its stake from 90% to 95% through equity infusion.

Dividend Announcement

The Board of Directors declared a second interim dividend of ₹0.50 per share (25% of face value). This represents a total cash outflow of ₹169.1 crore, in line with the company’s dividend policy.

Management Commentary

“We delivered a resilient performance during the quarter. In spite of unusually early monsoon rains in the peak summer months, we maintained realizations per case and EBITDA margins. Growth in international markets and strong currency movement supported profitability,” said Ravi Jaipuria, Chairman, Varun Beverages Ltd.

“We are strengthening our presence in the snack category and expanding our production footprint. With robust capacities now operational and a sharply focused distribution network, we are well-positioned to drive long-term value creation.”

Varun Beverages Stock Performance

Varun Beverages shares are trading at ₹508, which is a 4.55% gain on July 29, 2025, at 2:59 PM IST. Varun Beverages shares have dipped 24% in the last year, 21% in the year-to-date, and gained 11% in the previous month. Varun Beverages Ltd opened trading at ₹486.10 and moved between an intraday low of ₹478.05 and a high of ₹511.50. The stock has a market capitalisation of ₹1.72 lakh crore. Over the last 52 weeks, the stock has touched a high of ₹681.12 and a low of ₹419.55.

About Varun Beverages

Varun Beverages Ltd (VBL) is one of PepsiCo’s largest franchisees outside the U.S., producing and distributing a wide range of carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs). It operates across 26 Indian states and 6 union territories, and international markets including Nepal, Sri Lanka, Morocco, Zambia, Zimbabwe, South Africa, Lesotho, Eswatini, and the DRC, with distribution rights in several others. In FY24, India contributed approximately 72% of its net revenue from operations.

REF:https://nsearchives.nseindia.com/corporate/VBL_29072025120508_PressRelease.pdf

https://nsearchives.nseindia.com/corporate/VBL_29072025115116_Outcome.pdf

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