Varun Beverages Q1 profit surges 33% to US$85.44M on robust domestic, international sales

INDIA – Varun Beverages has posted a 33.47% rise in its consolidated profit after tax (PAT), reaching Rs 7.26 billion (US$85.44 million) for the quarter ending March 2025.  

The company attributed the increase to strong demand for beverages across India and selected international markets. 

Revenue from operations for the January–March quarter grew to Rs 5,680.03 crore, a substantial rise from Rs 4,397.98 crore (US$520.57M) in the same quarter of the previous year. The company adheres to the calendar year for financial reporting, marking the latest data as Q1 CY2025. 

Total expenses during the quarter increased to Rs 4,729.7 crore (US$559.8M), compared to Rs 3,690.42 crore (US$436.8M) in the first quarter of the previous calendar year, reflecting rising operational costs amid growing business volumes. 

Varun Beverages, a key bottling partner of PepsiCo, recorded a 30.1% year-on-year increase in consolidated sales volumes, reaching 312.4 million cases.  

Of this, India accounted for a 15.5% organic volume growth, while the remainder came from contributions by newly integrated territories, including South Africa and the Democratic Republic of Congo. 

Chairman Ravi Jaipuria noted that the integration of the South Africa market has been progressing well, with improved infrastructure and operational efficiency.  

The company reported sales of 141 million cases in South Africa over the trailing four quarters, reflecting a 13% year-on-year growth. 

However, gross margins declined by 171 basis points to 54.6%, primarily due to a higher proportion of in-house brands in South Africa, which offer lower margins and brand recognition than PepsiCo’s established products.  

Jaipuria stated that efforts are underway to expand PepsiCo’s portfolio in the region to boost profitability. 

In accordance with its dividend policy, Varun Beverages’ board approved an interim dividend of 25% of face value, amounting to 50 paisa per share. This will result in a total cash outflow of approximately Rs 169.1 crore (US$20M). 

Operating in around 10 countries, Varun Beverages has intensified its focus on Africa in recent years, targeting growing consumer demand and untapped market potential to sustain its international growth strategy. 

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