Varun Beverages’ first-quarter profit jumps 34% on record sales volume, expands PepsiCo snack footprint in Africa

Varun Beverages Limited (VBL), one of the world’s largest PepsiCo franchise bottlers, reported a strong start to calendar year 2025, with its first quarter consolidated revenue rising 28.9% year-on-year to ₹5,567 crore, propelled by double-digit growth in both Indian and African markets.

The company posted a 33.5% jump in net profit to ₹731 crore for the quarter ending March 31, aided by robust volume growth, operational efficiency, and lower finance costs following debt repayments from its qualified institutional placement (QIP) proceeds.

Consolidated sales volumes grew 30.1% from corresponding period last year to 312.4 million cases in the quarter, with India posting organic growth of 15.5% and South Africa and the Democratic Republic of Congo (DRC) contributing inorganic growth. South Africa alone recorded 141 million cases over the trailing four quarters, marking a 13% year-over-rise.

Though gross margins moderated to 54.6% due to a larger share of lower-margin own brands in South Africa and a higher mix of carbonated soft drinks (CSDs) in India, EBITDA rose 27.8% to ₹1,264 crore, in line with revenue growth.

Chairman Ravi Jaipuria highlighted the successful integration of South Africa and the commencement of commercial operations at greenfield plants in Kangra, Himachal Pradesh and Prayagraj, Uttar Pradesh. These facilities boost capacity just ahead of the peak summer season.

The company also began distribution of PepsiCo’s snack products in Zimbabwe and Zambia from February 2025, further diversifying into the packaged foods category. This marks a strategic push into high-growth African markets beyond beverages. Varun Beverages’ finance costs dropped sharply in India, resulting in net interest income of ₹10.8 crore during the quarter. The company also announced an interim dividend of ₹0.50 per share, amounting to ₹169.1 crore.

Backed by rising urbanisation, growing cold-chain infrastructure, and India’s favourable consumption dynamics, VBL remains bullish on long-term growth. The company has two more greenfield units in Bihar and Meghalaya slated to begin commercial operations later in 2025.