Varun Beverages Q1 Results: Pepsi Bottler Reports 30% Volume Growth; Overseas Net Realisation Remains Flat

Varun Beverages Ltd., one of the largest bottlers for PepsiCo, reported a 30.1% year-on-year increase in consolidated sales volume, reaching 312.4 million cases in Q1 of 2025, compared to 240.2 million cases in the same period last year. The company stated that the March quarter growth was driven by a 15.5% organic volume increase in India.

Net realization per case in India rose by 1.8%, while it remained flat in other international markets (excluding South Africa). At the consolidated level, net realization per case declined by 0.9%, primarily due to lower pricing of own brands in South Africa. This metric reflects the average revenue the company earns from selling one case of its soft drink products.

"Historically, net realizations in South Africa are lower due to a higher mix of own brands. However, we are actively working to scale PepsiCo’s portfolio, which is expected to support improvements in realizations and margins going forward," said Varun Beverages Chairman Ravi Jaipuria.

He noted that the company achieved 141 million cases in South Africa over the trailing four quarters, marking a 13% growth compared to the same period last year.

Revenue from operations rose by 28.9% to Rs. 5,566.9 crore in Q1 of 2025, compared to Rs. 4,317.3 crore in Q1 of 2024. During the same period, EBITDA grew 27.8% to Rs. 1,263.9 crore, up from Rs. 988.7 crore a year earlier.

In India, EBITDA margins improved by 111 basis points due to operational efficiencies. However, at the consolidated level, margins dipped by 20 basis points, impacted by weaker profitability in South Africa (14.4% margin), which had a higher contribution to the revenue mix this quarter.

Profit after tax (PAT) rose 33.5% to Rs. 731.4 crore, up from Rs. 547.9 crore in Q1 of 2024. This was supported by strong volume growth and lower finance costs.

Depreciation increased 45.3% due to the commissioning of new plants in Supa, Gorakhpur, and Khordha, along with the consolidation of operations in South Africa and the Democratic Republic of Congo (DRC).

Following the repayment of debt using QIP proceeds, finance costs in India are now negligible, with the company earning Rs. 10.8 crore in interest income during the quarter. However, interest costs continue in South Africa, including lease rentals of Rs. 8.6 crore under Ind AS 116, as the manufacturing units there are leased.

The company began operations at its new greenfield facilities in Kangra and Prayagraj. Two additional facilities in Bihar and Meghalaya are on track to begin production in 2025. Backward integration facilities at Prayagraj and DRC have also been established, according to Jaipuria in a regulatory filing.

The Board of Directors has declared an interim dividend of Rs. 0.50 per share, with a total payout of approximately Rs. 1,691 million.

Shares of Varun Beverages were trading flat at Rs 528 at 1 PM, recovering from an earlier decline.