Varun Beverages reports Q3 growth, driven by African expansion and diversification

Varun Beverages Limited achieved a 2.4% rise in consolidated sales volumes in Q3 CY2025, reaching 273.8 million cases, despite prolonged rainfall impacting domestic volumes. International operations recorded a 9% growth, with South Africa showing strong performance. The company’s net realization per case stood at Rs. 178.84. Gross margins improved by 119 basis points to 56.7%, though EBITDA remained stable at Rs. 11,473.8 million, with a marginal moderation to 23.4% due to an accounting shift.

Profit after tax (PAT) saw a significant increase of 18.5% to Rs. 7,451.9 million, driven by lower finance costs and higher other income, including interest on deposits in India and favorable currency movements. The company remains debt-free at the consolidated level. Varun Beverages is expanding its portfolio with a wholly-owned subsidiary in Kenya for dairy and beverages, and testing beer distribution in certain African territories through an exclusive agreement with Carlsberg Breweries A/S.

The company's snacks facility in Morocco is at full-scale operation, and the Zimbabwe plant is nearing commissioning, contributing to diversification beyond beverages. The food segment currently contributes approximately Rs. 300 crore annually. Varun Beverages anticipates double-digit growth in Africa, aiming for early to mid-teens revenue growth from the next quarter, with a focus on markets like Zambia, Zimbabwe, DRC, and South Africa.