Varun Beverages (VBL) Q3 2025 earnings summary

Executive summary

• Consolidated sales volumes rose 2.4% year-over-year in Q3 2025, led by 9% international growth, while domestic volumes were flat due to prolonged rainfall in India.

• PAT increased 18.5% to INR 7,451.92 million, supported by lower finance costs and higher other income.

• Expansion includes a new Kenya subsidiary, snacks operations in Morocco, and entry into alcoholic beverages in Africa and India.

• Board approved unaudited financial results and MOA changes to expand into packaged foods, renewable energy, and alcoholic beverages.

• Company remains confident in India's long-term beverage market potential, supported by low per capita consumption and ongoing investments.

Financial highlights

• Revenue from operations (net of excise and GST) increased 1.9% year-over-year to INR 48,966.5 million in Q3 2025.

• EBITDA was stable at INR 11,473.8 million, with margins at 23.4% versus 24% last year.

• Gross margin improved by 119 bps to 56.7%, driven by product mix and backward integration.

• Net realization per case was INR 178.84, slightly down from INR 179.62 in Q3 2024, due to a higher mix of packaged drinking water.

• Depreciation increased due to new plant commissioning and expansions.

Outlook and guidance

• Management expects to capture demand recovery in the upcoming season, targeting sustainable double-digit growth in India as weather normalizes.

• Significant long-term growth potential in India due to low per capita consumption and increasing rural penetration.

• Continued investments in capacity, distribution, and cold-chain infrastructure to capture future demand.

• Focus on diversifying product offerings, including alcoholic beverages, snacks, and energy drinks.