Varun Beverages Limited (VBL), one of PepsiCo's largest franchisee bottlers, has reported mixed financial results for the second quarter of 2025, with revenue decline offset by margin expansion and profit growth. The company also announced key developments and an interim dividend.

Financial Performance

For Q2 2025, VBL reported a 2.5% decline in revenue to Rs. 70,173.70 million, primarily due to a 3.0% drop in consolidated sales volume to 389.7 million cases. The volume decrease was mainly attributed to unseasonal rainfall in India, which led to a 7.1% fall in Indian volumes. However, international volumes grew by 15.1%.

Despite the revenue decline, the company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased by 0.4% to Rs. 19,987.70 million. The EBITDA margin expanded by 82 basis points to 28.5%, indicating improved operational efficiency.

VBL's Profit After Tax (PAT) grew by 5.0% to Rs. 13,254.90 million for Q2 2025.

H1 2025 Performance

For the first half of 2025, VBL demonstrated stronger performance:

• Revenue grew by 9.3% to Rs. 125,843.10 million
• EBITDA increased by 9.5% to Rs. 32,627.40 million
• PAT rose by 13.6% to Rs. 20,568.50 million

Key Financial Metrics

All financial figures in million rupees

Interim Dividend

VBL's Board of Directors has approved a second interim dividend of Rs. 0.50 per share for the financial year 2025.

Expansion and New Ventures

VBL reported several key developments during the first half of 2025:

1. Commissioned new production facilities across four Indian locations:

   • Damtal, Himachal Pradesh
   • Prayagraj, Uttar Pradesh
   • Buxar, Bihar
   • Mendipathar, Meghalaya

2. Started commercial production of PepsiCo's snack product "Cheetos" in Morocco through its subsidiary, Varun Beverages Morocco SA.

3. Acquired a 50% stake in Everest Industrial Lanka (Private) Limited, a Sri Lankan company engaged in the production and distribution of commercial visi-coolers and related accessories.

These strategic moves demonstrate Varun Beverages' commitment to growth and operational efficiency, despite challenging market conditions. The company's expansion into new territories and product lines, coupled with its improved profitability and margin expansion, positions it well for future growth in the beverage industry.

Varun Beverages , PepsiCo's largest franchise bottler outside the United States, is set to reveal its financial performance for the April-June quarter on Monday, July 28. The company's board will also deliberate on declaring a second interim dividend for the financial year 2025 during the same meeting.

Earnings Call Scheduled

Investors and analysts can gain further insights into the company's performance during an earnings call scheduled for Tuesday, July 29 at 2:30 p.m. IST. This call will provide an opportunity for stakeholders to engage with the management and discuss the quarterly results in detail.

Previous Quarter Performance

In the preceding quarter, Varun Beverages demonstrated robust growth:

Stock Performance

The company, which follows a January-December financial reporting cycle, has seen its stock face challenges in the current year:

• Year-to-date decline: 26.79%
• Closing price on Friday: Rs 476.50 (down 1.95%)

Investors will be keenly watching the upcoming results to gauge the company's performance in the face of these stock market headwinds.

About Varun Beverages

Varun Beverages holds the distinction of being PepsiCo's largest franchise bottler outside the United States. Based in Gurugram, the company plays a crucial role in PepsiCo's beverage distribution network in India and other international markets.

As the market awaits the Q2 results and potential dividend announcement, all eyes will be on Varun Beverages to see how it has navigated the April-June quarter and its outlook for the remainder of the financial year.