Varun Beverages Q1 Earnings Preview: Brokerages See Pepsi Bottler Outperforming Muted FMCG Pack
Brokerages are largely optimistic about Varun Beverages Ltd.'s first quarter performance for the calendar year 2025, calling the PepsiCo bottler a rare outperformer in an otherwise subdued fast-moving consumer goods space.
Analysts expect strong volume-led growth, boosted by international acquisitions and a favourable summer season, to help the company buck the trend of margin pressure seen across peers.
The company will post its earnings on Wednesday after its board meeting, where the directors will also consider issuing a dividend.
According to Bloomberg consensus estimates, revenue for Varun Beverages is expected to rise 25% year-on-year to Rs 5,476 crore in the March quarter. Ebitda is likely to jump 25% to Rs 1,235 crore, while margins are seen stable at 22%. Net profit is projected to surge 38% to Rs 741 crore from Rs 537 crore a year ago.
Most brokerages agree that Varun Beverages is set to lead volume growth in the FMCG pack. Domestic volumes are expected to grow in double digits, aided by early summer demand, while international markets—especially from acquisitions in Africa—are expected to show significant contribution.
Several analysts flag its investments in the South African subsidiary Beverage Company Proprietary (BevCo) and the PepsiCo production facility in the Democratic Republic of the Congo as key revenue drivers this quarter.
Varun Beverages Q1CY25 Preview (Consolidated, YoY)
Revenue is likely to rise 25% year-on-year to Rs 5476 crore from Rs 4398 crore.
Ebitda may surge 25% to Rs 1235 crore from Rs 989 crore.
Ebitda margin seen flat at 22%
Net profit is seen rising 38% to Rs 741 crore from Rs 537 crore.
Brokerage Views
BofA Global | Target Price: Rs 630 | Rating: Buy
BofA expects 29% year-on-year revenue growth, 27% Ebitda growth, and 43% profit growth for Varun Beverages.
Sees 12% domestic volume growth with stable margins and strong earnings, aided by recent fundraising.
Warns that stock valuation may come under scrutiny amid rising competition and increased international exposure.
Citi | Target Price: Rs 750 | Rating: Buy
Calls Varun Beverages one of its top picks among FMCG names.
Expects 30% revenue growth and a 28% jump in Ebitda.
Cites self-help initiatives and strong execution as key positives in a muted demand environment.
Jefferies | Target Price: Rs 715 | Rating: Buy
Sees Varun Beverages leading volume growth in the sector with 12% domestic and 21% international volume growth (excluding acquisitions).
Projects Rs 570 crore revenue contribution from South Africa (BevCo acquisition).
Ebitda margin likely to contract due to BevCo drag, but overall reported earnings growth seen as strong.
JPMorgan | Target Price: Rs 650 | Rating: Overweight
Expects one of the strongest performances in the staples space: 30% revenue growth, 30% Ebitda growth, and 33% profit growth.
Morgan Stanley | TP: Rs 615 | Rating: Overweight
Sees 10% growth in domestic revenue and 80% growth in international revenue (organic plus inorganic).
Margins expected to decline year-on-year but improve sequentially.
Nuvama | Target Price: Rs 659 | Rating: Buy
Expects Varun Beverages to lead volume growth in the domestic FMCG space.
Sees 12–13% YoY volume growth in India and 30% consolidated volume growth due to M&A.
New launches like Sting Gold and low-priced Gatorade expected to support performance.
Motilal Oswal Financial Services | TP: Rs 670 | Rating: Buy
Projects 29% YoY sales volume growth in the March quarter.
Expects stable margins and highlights African expansion as a key growth catalyst.
DAM Capital | Target Price: Rs 670 | Rating: Buy
Forecasts 31% revenue growth, led by acquisitions in Africa.
Estimates 11% organic volume growth in India and 6% in international markets.
Elara Capital | Target Price: Rs 555 | Rating: Accumulate
Expects double-digit revenue growth driven by summer demand and acquisitions.
Flags VBL as a preferred pick in the FMCG universe.
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