Revenue from operations (net of excise and GST) increased 1.9% YoY to Rs 4,896.65 crore from Rs 4,804.68 crore in Q3 CY2024. Consolidated sales volumes rose 2.4% to 273.8 million cases from 267.5 million cases a year earlier, despite persistent rainfall across India that weighed on domestic consumption.

India volumes were largely flat, while international volumes grew 9%, led by a strong performance in South Africa. Net realization per case stood at Rs 178.8 versus Rs 179.6 in the same period last year, reflecting a higher mix of packaged drinking water in overseas markets. Product mix during the quarter consisted of 74% carbonated soft drinks (CSD), 4% non-carbonated beverages (NCB), and 22% packaged drinking water.

EBITDA remained steady at Rs 1,147.38 crore compared with Rs 1,151.12 crore in Q3 CY2024. EBITDA margin stood at 23.4%, down 60 basis points from 24% a year earlier due to a shift in cost structure following the company’s backward integration initiatives. Gross margin, however, improved by 119 basis points to 56.7%, supported by increased mix of water in International markets.

Varun Beverages also announced a major diversification move into alcoholic beverages. Certain African subsidiaries of the company have entered into an exclusive distribution agreement with Carlsberg Breweries A/S to test-market the Carlsberg brand in their territories.

Further, the company has amended its Memorandum of Association to include the manufacture and distribution of alcoholic beverages, including beer, wine, whisky, brandy, gin, rum, and vodka, in both India and international markets. The company said it aims to tap into the growing demand for ready-to-drink (RTD) and premium alcoholic beverages, which offer strong long-term growth potential.

Ravi Jaipuria, chairman, Varun Beverages, said, "While the extended monsoon season impacted consumption trends in India, we remain confident in the significant long-term potential of the domestic beverage industry. With low per capita consumption and rising penetration in semi-urban and rural markets, the opportunity for growth continues to be immense. Our ongoing investments in capacity expansion, distribution reach, and cold-chain infrastructure are further strengthening on-ground execution, ensuring we are well-prepared to capture demand recovery in the upcoming season and deliver sustainable growth for all stakeholders."

Varun Beverages is one of the largest franchisee of PepsiCo in the world (outside USA). The company produces and distributes a wide range of carbonated soft drinks (CSDs), as well as a large selection of non-carbonated beverages (NCBs), including packaged drinking water sold under trademarks owned by PepsiCo.