Varun Beverages Q3 Net Profit Rises 19% on Strong International Sales; Shares Jump 8.5%

Shares of Varun Beverages Ltd (VBL) — the bottler for PepsiCo India — surged 8.5% on October 29 after the company reported a 19% year-on-year rise in net profit for the September quarter (Q3 CY2025), supported by strong international sales and lower finance costs.

At 12:35 PM, VBL shares were trading 8.5% higher at ₹493 apiece on the NSE, marking their biggest intraday gain in nearly a year. Over 17 million shares changed hands — nearly four times the 30-day average volume.

Q3 Financial Performance

Varun Beverages reported a net profit of ₹745 crore, compared to ₹626 crore in the same quarter last year, reflecting a 19% increase.
The company attributed the growth to lower finance costs, higher other income, and favourable currency movements in international markets.

Revenue rose 2% year-on-year to ₹4,897 crore during the quarter.

However, EBITDA margins saw a marginal decline of 53 basis points, falling to 23.4% from 24% a year earlier, while EBITDA remained broadly flat.

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International Growth Drives Performance

According to Chairman Ravi Jaipuria, consolidated sales volumes increased by 2.4%, supported by a 9% growth in international markets, even as domestic volumes were impacted by prolonged rainfall across India.

“Performance in international territories continued to be healthy, with South Africa delivering another quarter of strong growth,” Jaipuria said, adding that the company sees “significant potential” to expand further in the region.

The company’s ongoing backward integration initiatives across key locations are also enhancing efficiency and operational resilience, he added.

Strategic Expansion: Carlsberg Partnership & Kenya Subsidiary

Varun Beverages announced two key strategic developments aimed at diversifying its portfolio and expanding internationally:

1. Partnership with Carlsberg Breweries A/S

   • Certain African subsidiaries of VBL have entered into an exclusive distribution agreement with Carlsberg to test market beer in their territories under the Carlsberg brand.

   • The company noted the rising popularity of Ready-to-Drink (RTD) beverages and alcoholic drinks, including beer, wine, and spirits, as part of its broader growth strategy.

2. New Subsidiary in Kenya

   • VBL announced the incorporation of a wholly-owned subsidiary in Kenya to manufacture, distribute, and sell beverages under the Varun Beverages brand.

   • The expansion aligns with the company’s long-term goal to strengthen its presence in key African growth markets.

Market Reaction

The announcement of strong quarterly results, coupled with new international partnerships, drove investor optimism, helping the stock recover from a three-day losing streak.

Analysts viewed the company’s Africa expansion and diversification into alcoholic beverages as part of a larger strategy to build sustainable revenue streams beyond its existing PepsiCo portfolio.

Conclusion

Varun Beverages delivered a steady performance in Q3, with profit growth driven by international demand and cost efficiency. Despite muted domestic volumes, the company’s strategic moves — including its Carlsberg tie-up and Kenya expansion — highlight its focus on diversification and long-term growth.

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