Varun Beverages reported a strong set of quarterly results, with festive-season demand in India and steady overseas growth helping lift margins and profitability.
The performance was driven by higher sales volumes, lower borrowing costs, and additional income from currency movements and interest, underscoring the benefits of scale for one of the largest PepsiCo bottlers operating outside the United States.
Shares rose 4.9% in afternoon trade after the earnings announcement, reflecting investor confidence in the company’s operational momentum across both domestic and international markets.
The company said net profit rose 36% to 2.52 billion rupees, or $27.87 million, in the December quarter.
The improvement came despite a competitive consumer environment, as volume growth and cost efficiencies combined to support earnings.
Varun Beverages packages and distributes beverages under the Pepsi and Tropicana brands in India and several overseas markets, while also selling drinks under its own labels, such as Jive and Cream Bell.
Festive season boosts India volumes
India remained a key driver of growth during the quarter, supported by higher consumption during the festive period.
Sales volumes in the domestic market increased 10.5%, contributing to a 10.2% rise in consolidated volumes.
The seasonal uplift helped improve plant utilisation and distribution efficiency, allowing the company to spread fixed costs across a larger sales base.
Stronger volumes in India also reflected continued expansion in reach and availability across urban and semi-urban markets.
The company has been investing in capacity and logistics, which helped it respond to higher demand during peak consumption months without significant cost pressure.
Overseas markets add momentum
International operations continued to contribute meaningfully to growth, with volumes rising 10% in the quarter.
Africa was the strongest performer among overseas regions, reinforcing the importance of geographic diversification to the company’s business model.
Growth outside India helped balance seasonality and supported consolidated margins through scale benefits.
Favourable currency movements in some international markets also aided profitability.
The company said these currency gains, along with interest income on deposits, lifted other income during the quarter, adding to the overall improvement in earnings.
Revenue growth tracks volume expansion
Revenue from operations rose 13.5% year on year to 43.35 billion rupees in the December quarter.
The increase broadly tracked volume growth across regions, supported by product mix and consistent demand across categories.
Higher throughput allowed Varun Beverages to extract operating leverage, as incremental volumes contributed more directly to earnings.
The company’s diversified portfolio across carbonated beverages, juices, and value-added drinks helped maintain demand across different consumer segments, even as cost pressures remained a factor in the broader market.
Lower finance costs support margins
In addition to volume-led growth, lower finance costs played a key role in supporting margins during the quarter.
Reduced borrowing expenses eased pressure on profitability compared with earlier periods marked by higher interest rates.
Combined with higher other income, this helped strengthen net profit growth alongside operational gains.
Varun Beverages is one of PepsiCo India’s largest bottling partners, giving it exposure to some of the country’s most widely consumed beverage brands.
Its ability to deliver growth across India and overseas markets during the festive quarter highlights the resilience of its operating model and the benefits of scale in a competitive beverage sector.
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