Varun Beverages Ltd, a prominent bottler for PepsiCo, has unveiled its impressive financial results for the first quarter of calendar year 2025. The company’s profit surged to Rs 726.49 crore, reflecting a substantial 35.22% increase compared to Rs 537.27 crore during the same period last year. This remarkable growth can be attributed to both strong volume expansion and reduced finance costs, showcasing the company’s robust performance.

Revenue Growth and Operational Highlights

In Q1 CY2025, Varun Beverages reported revenue from operations of Rs 5,680.03 crore, marking a 29.15% rise from Rs 4,397.98 crore a year earlier. The company’s EBITDA reached Rs 1,264 crore, up 27.8% year-on-year.

• EBITDA Margin Improvements:
  • India saw an increase of 111 basis points in EBITDA margins due to operational efficiencies.
  • However, consolidated EBITDA margins experienced a slight decline of 20 basis points, primarily due to lower profitability in the South African market.

Varun Beverages achieved a consolidated sales volume growth of 30.1%, totaling 312.4 million cases in Q1 CY2025, up from 240.2 million cases the previous year. The growth was fueled by an impressive 15.5% organic volume increase in India, alongside contributions from South Africa and the Democratic Republic of Congo (DRC).

Pricing and Market Insights

The net realization per case in India rose by 1.8%, while it remained stable in international markets, excluding South Africa. Overall, the consolidated net realization per case fell by 0.9% due to lower earnings from owned brands in South Africa, which recorded 141 million cases over the last four quarters, reflecting a growth of approximately 13% year-on-year.

• Product Mix Breakdown:
  • Carbonated Soft Drinks (CSD): 75%
  • Non-Carbonated Beverages (NCB): 7%
  • Packaged Drinking Water: 18%

Additionally, the share of low-sugar and no-sugar products in sales volumes increased to about 59%, highlighting the company’s commitment to healthier options.

Executive Insights

Ravi Jaipuria, Chairman of Varun Beverages, expressed satisfaction with the company’s operational and financial results. He noted, “Our consolidated sales volumes have surged by 30.1% year-over-year, driven by robust organic growth in India. The integration of operations in South Africa is progressing well, focusing on enhancing infrastructure and streamlining processes.”

Jaipuria also pointed out the challenges in South Africa, stating, “Historically, net realizations have been lower due to a higher mix of owned brands. However, we are actively working to enhance PepsiCo’s portfolio, which we believe will improve realizations and margins in the future.”

Dividend Declaration

In line with its shareholder-friendly policies, the Varun Beverages board recommended a final dividend of Rs 0.50 per equity share for the fiscal year ending December 31, 2024. This dividend was approved during the Annual General Meeting on April 3, 2025, and was subsequently distributed in April. The board has also sanctioned an interim dividend of 25% of face value, translating to Rs 0.50 per share, resulting in an estimated cash outflow of around Rs 1,691 million.

Varun Beverages continues to demonstrate strong growth and strategic initiatives, positioning itself firmly in the competitive beverage market.