Shares of Varun Beverages, the PepsiCo bottler, saw an uptick on Monday, trading 2.14% higher at Rs 533.25 on the Bombay Stock Exchange (BSE) ahead of its Q1 earnings and interim dividend announcement scheduled for March 30, 2025. By the afternoon session, a total of 3.05 lakh shares of the company had changed hands, contributing to a turnover of Rs 16.27 crore. The stock has surged 27% from its 52-week low of Rs 419.40, which was recorded on March 3 of this year.
Expectations for Q1 FY2025 Earnings
Analysts at Axis Securities expect Varun Beverages to report a robust performance in Q1 FY2025. They project a 23% year-on-year (YoY) increase in sales, with revenues anticipated to reach Rs 4,753 crore compared to Rs 3,871 crore in the same quarter of the previous fiscal year. EBITDA is expected to rise by 24.5% to Rs 1,098 crore, up from Rs 882 crore in Q1 FY2024. Net profit for the quarter is likely to reach Rs 575 crore, reflecting a 12% increase from Rs 514 crore in Q1 FY2024. Additionally, the EBITDA margin is expected to improve by 32 basis points to 23.1%, compared to 22.8% in the corresponding quarter of the previous fiscal.
Impact of Domestic Business and Key Factors to Watch
While the outlook appears positive, Axis Securities notes that the domestic business may face some challenges due to the impact of rains. Key factors to watch during the earnings release include margins, the performance of the Sting brand, the dairy and foods portfolio, and commentary on Varun Beverages’ recent acquisition of its African business.
Dr. Choksey, another brokerage, has a slightly more conservative outlook, expecting a 7.5% YoY increase in net profit for Q1 FY2025. This reflects the strong operating performance the company has demonstrated in recent periods. Dr. Choksey forecasts a 10.7% YoY growth in revenue for the quarter, with a significant 29.5% quarter-on-quarter (QoQ) increase.
Expansion and New Product Launches
The company’s expansion into international markets, particularly its recent acquisition in South Africa, is also expected to be a focal point in the earnings report. Additionally, Varun Beverages is planning to launch a new Jeera-flavored beverage this season, which may contribute to its overall performance.
Interim Dividend Announcement
Along with the earnings report, the company’s board will also consider the declaration of an interim dividend for the financial year 2025, which will be paid to equity shareholders.
Previous Performance
In the fourth quarter of the previous year, Varun Beverages reported a strong 40.3% increase in net profit, which climbed to Rs 185.1 crore compared to Rs 131.9 crore in the same period last year. Revenue for the quarter also surged by 40.3%, reaching Rs 3,818 crore, up from Rs 2,731 crore in Q4 FY2024. EBITDA grew by 38.7%, reaching Rs 580 crore compared to Rs 418 crore in the corresponding quarter of the previous year. The board also approved a final dividend of Rs 0.50 per share.
Varun Beverages, which operates as a franchisee of PepsiCo, produces and distributes a range of carbonated soft drinks (CSDs) as well as non-carbonated beverages (NCBs), including packaged drinking water under PepsiCo trademarks.
