Varun Beverages Q3 Results 2025: Revenue, Volume, EBITDA and Profit Highlights

Varun Beverages, one of the largest PepsiCo bottlers outside the US and a major player in India's beverage space, is often seen as a good proxy for FMCG demand trends. The July-September quarter (Q3 CY2025) typically sees some seasonal softness compared to peak summer months, but it's still key for gauging how weather, consumer spending, and international ops are shaping up.

In this Q3, the company delivered modest top-line growth, with volumes supported by strong international performance offsetting weakness in India due to extended rains. The standout was double-digit profit after tax (PAT) growth, helped by lower finance costs and higher other income.

Below is an official PDF announcement for Varun Beverages Q3 Results:

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Varun Beverages Q3 2025 Results Highlights

Here's a quick snapshot of the key numbers (consolidated, YoY basis):

• Consolidated sales volume: 273.8 million cases, up 2.4% from 267.5 million cases last year.
• Net revenue from operations: Around ₹4,897 crore (or ₹48,966 million), up about 2% YoY.
• EBITDA: Roughly ₹1,147 crore, nearly flat (down slightly ~0.3%), with margins around 23.4% (minor compression from 24%).
• PAT: Approximately ₹741-745 crore, up 18.5-19.5% YoY.

Key drivers included muted domestic volumes from prolonged rainfall hurting on-the-go consumption, balanced by solid 9% volume growth internationally (led by South Africa and other African markets).

Detailed Financial Performance in Q3

Revenue, Volume and Realisation

Consolidated volumes grew a modest 2.4% YoY to 273.8 million cases. Breaking it down, India volumes were almost flat — the extended monsoon across key regions dampened demand for impulse buys like soft drinks.

International markets stepped up with 9% growth, providing the main lift. Net revenue rose about 2% YoY to ₹4,897 crore. Realisation per case dipped slightly, partly because of a higher mix of packaged drinking water (which typically carries lower pricing) in international markets. Product-wise, carbonated soft drinks (CSD) made up ~74%, non-carbonated beverages (NCB) ~4%, and packaged water ~22% in the quarter.

Profitability, Margins and Cost Drivers

EBITDA stayed broadly flat at around ₹1,147 crore, with margins at 23.4% (a touch lower than last year's 24%). On the positive side, gross margins expanded by ~119 basis points to 56.7%, thanks to the higher water mix internationally and benefits from backward integration (more in-house production of preforms, closures, etc., shifting some costs internally).

This gross margin gain was offset somewhat by higher fixed costs and the overall mix. The real PAT boost came lower down: PAT jumped ~18.5-19.5% to ₹741-745 crore, driven by reduced finance costs (from debt reduction efforts) and higher other income, including interest on deposits and favorable forex movements in overseas ops.

Segment and Geography-Wise Performance

India vs International Markets

India, the core market, saw volumes remain subdued due to persistent rainfall that disrupted outdoor and on-the-go consumption  a common headwind in this season for beverages. Management noted the weather impact but highlighted resilience in the portfolio.

International markets shone brighter, with 9% volume growth fueled by strong traction in South Africa and broader Africa. This geographic diversification helped cushion the India slowdown and supported overall volume stability.

Product Portfolio and Mix Shift

The company continues to see good traction in healthier options  low-sugar and no-added-sugar products now account for over half of volumes in the first nine months. This shift aids long-term margin health and aligns with consumer preferences toward better-for-you choices.

The higher packaged water contribution internationally boosted volumes and helped utilize capacity better, even if it pressured average realizations a bit.

9M 2025 Performance Overview

For the first nine months of CY2025 (Jan-Sep), the picture looks healthier overall:

• Net revenue: Around ₹178,908 million, up ~7.1% YoY.
• EBITDA: ₹44,101 million or so, up ~6.8% with solid margins.
• PAT: ₹27,847-28,020 million, up ~14.9% YoY.

Low/no-sugar products contributed ~56% of consolidated volumes (around 45% in India), reflecting ongoing premiumization in the portfolio.

Strategic Updates and Expansion Plans

International Expansion and New Territories

Africa remains a growth engine, with South Africa leading and new pushes like subsidiary plans in Kenya. These moves help offset India's weather volatility and position the company for stronger long-term volume CAGR through geographic diversification.

Diversification and New Businesses

Backward integration continues to pay off, moving more costs in-house and supporting margins. Management has touched on exploring adjacent categories, including potential entry into alcoholic beverages in select international markets (e.g., via partnerships like Carlsberg in Africa), as a way to broaden the business over time.

Balance Sheet, Cash Flows and Leverage

The company maintains a comfortable balance sheet position, with commentary around strong cash generation in the period and reduced leverage helping lower finance costs  a key tailwind for Q3 PAT and future capex needs for expansion.

Management Commentary and Outlook

Management described the performance as steady despite the weather challenges in India, with international markets providing good support. They expect demand in India to normalize as rains ease, with festive season tailwinds and structural growth in soft drinks and packaged water driving recovery.

Key Risks and Challenges

Weather remains a big variable in India (extended monsoons or unexpected heat waves), along with competition in low-price segments (e.g., ₹10 SKUs) and potential realization pressure from mix shifts. Internationally, forex volatility, regulatory factors, and execution in new markets/Africa expansion are watch points.

Disclaimer 

This article is for informational purposes only and based on publicly available data as of Q3 CY2025 (ended September 2025). It does not constitute investment advice, recommendation, or solicitation to buy/sell securities. Stock markets involve risks; past performance isn't indicative of future results. Readers should consult qualified financial advisors before making decisions.