Varun Beverages: Shares rise ahead of Q1 earnings, here's what to expect

Shares of Pepsico bottler Varun Beverages were trading higher on Monday, two days ahead of the March 2025 quarter earnings and interim dividend set to be announced on March 30. Varun Beverages stock was trading 2.14% higher at Rs 533.25 on BSE in the afternoon session today.  A total of 3.05 lakh shares of the firm changed hands amounting to a turnover of Rs 16.27 crore. On the other hand, the stock has risen 27% from its 52-week low of Rs 419.40 reached on March 3 this year.

Axis Securities expects sales to rise 23% YoY led by strong performance in subsidiary. Revenue is expected at Rs 4,753 crore in Q1 against Rs 3871 crore in the corresponding quarter of the previous fiscal. EBITDA is seen rising 24.5% to Rs 1098 crore in the last quarter against Rs 882 crore in the Q1 of the previous fiscal. The firm follows the calendar year (January to December) for reporting its earnings. 

Net profit is likely at Rs 575 crore in the March 2025 quarter, up 12% against Rs 514 crore in the March 2024 quarter. 

Axis expects EBITDA margin to rise 32 bps to 23.1% in Q1 compared to 22.8% in the corresponding quarter of the previous fiscal. 

However, it expects domestic business to be impacted owing to rains. The brokerage lists margin outlook; traction from Sting, dairy and foods portfolio and comment on recent acquisition of Africa business as key monitorables in the earnings for March 2025 quarter. m

Another brokerage Dr Choksey expects Q1 net profit to rise 7.5% YoY, reflecting strong operating performance. Net profit is expected to reflect strong operating performance. 

In Q1CY25E, the brokerage expects Varun Beverages to report a 10.7% YoY (+29.5% QoQ) revenue growth, drive. 

EBITDA margins are projected to increase by 60 bps YoY, led by positive operating leverage

Key factors to consider during the earnings are VBL’s expansion into international markets and its recent acquisition in South Africa.  The company is planning to launch a Jeera-flavored beverage this season, said the brokerage. 

The board would also consider declaration of interim dividend to the equity shareholders of the company for the financial year 2025. 
 
In the Q4 of previous year, Varun Beverages announced a strong 40.3% increase in net profit. Profit climbed to Rs 185.1 crore compared to Rs 131.9 crore in the same quarter last year. Revenue from operations also saw a significant boost, rising 40.3% to Rs 3,818 crore, up from Rs 2,731 crore during the previous fiscal's corresponding period. EBITDA climbed 38.7%, reaching Rs 580 crore compared to Rs 418 crore in the same quarter of the prior year. The board also approved a final dividend of Rs 0.50 per share.

Varun Beverages is a beverage company. It operates franchisee of PepsiCo. The company produces and distributes a 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.