Shares of Varun Beverages Ltd jumps with heavy volume after announcing Q3 & 9M CY2025 financial results!

Varun Beverages Limited (VBL), a major PepsiCo franchisee, reported its financial results for the third quarter (Q3) and nine months (9M) ended September 30, 2025. In Q3 CY2025, the company achieved a 1.9 per cent YoY increase in revenue from operations, totalling Rs 48,966.5 million. This growth was driven by a 2.4 per cent rise in consolidated sales volume to 273.8 million cases, despite persistent heavy rainfall across India. Notably, India's volume remained relatively flat, while International volumes surged by 9.0 per cent, primarily led by a strong performance in South Africa.

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Despite the revenue growth, Q3 profitability metrics saw minor fluctuations. EBITDA slightly decreased by 0.3 per cent to Rs 11,473.8 million and the EBITDA margin declined marginally by 53 basis points to 23.4 per cent. However, the company successfully improved its Gross margins by 119 bps to 56.7 per cent. This improvement was attributed to a higher mix of packaged drinking water in international markets and cost efficiencies achieved through increased in-house backward integration initiatives abroad. The most significant financial highlight was the 18.5 per cent increase in Profit After Tax (PAT), which reached Rs 7,451.9 million, largely propelled by lower finance costs and higher other income from interest on deposits and favorable currency movements.

Looking at the cumulative nine-month performance, VBL demonstrated robust growth across key financial indicators. The 9M CY2025 revenue from operations grew by 7.1 per cent YoY to Rs 174,809.6 million. This healthy top-line expansion translated into strong bottom-line growth, with EBITDA increasing by 6.8 per cent to Rs 44,101.1 million and PAT rising by 14.9 per cent to Rs 28,020.4 million. Furthermore, the company noted that its low-sugar / no added sugar products constituted about 56 per cent of the consolidated sales volumes during this period, highlighting a significant consumer shift in their product mix.

VBL is actively pursuing strategic expansion and diversification opportunities. Key developments include the incorporation of a wholly-owned subsidiary in Kenya for beverage manufacturing and distribution. In a significant move to explore new market segments, certain African subsidiaries entered an exclusive Distribution Agreement with Carlsberg Breweries A/S to test market the Carlsberg beer brand. Additionally, VBL is laying the groundwork for future growth by adding the alcoholic beverage business to its main objects to capitalize on the Ready To Drink (RTD) and variety alcoholic beverages market and has formed a joint venture, White Peak Refrigeration Private Limited, to manufacture visi-coolers and refrigeration equipment in India.

About the Company

Varun Beverages Limited (VBL) is one of the world's largest PepsiCo franchisees (outside the USA), producing and distributing a vast range of PepsiCo's carbonated soft drinks (CSDs), non-carbonated beverages (NCBs) and packaged drinking water. Since the 1990s, VBL has expanded its partnership to cover 26 Indian States and 6 Union Territories—which made up approximately 72 per cent of its Fiscal 2024 revenue—along with franchise rights in Nepal, Sri Lanka, Morocco, Zambia, Zimbabwe, South Africa and other African territories, handling key brands like Pepsi, Mountain Dew, Sting, Slice, Tropicana and Aquafina.

On Wednesday, shares of Varun Beverages Ltd jumped over 10 per cent to Rs 500.80 per share from its previous closing of Rs 453.85 per share with a Spurt in Volume by more than 9 times on the BSE. The stock’s 52-week high is Rs 663.70 per share and its 52-week low is Rs 419.40 per share. The company has a market cap of over Rs 1.60 lakh crore and has delivered good profit growth of 47.3 per cent CAGR over the last 5 years. The shares of the company have an ROE of 22 per cent and an ROCE of 25 per cent. The stock gave multibagger returns of over 750 per cent in just 5 years whereas BSE Sensex Index was up by 114 per cent.

Disclaimer: The article is for informational purposes only and not investment advice.