VBLNSENovember 4, 2025

Varun Beverages Limited

6,106words

127turns

14analyst exchanges

1executives

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Management on call

Ravi Jaipuria to make his opening remarks. Ravi Jaipuria

Good afternoon, everyone, and thank you for joining us on our earnings conference

Key numbers — 40 extracted

2.4%

have delivered a steady performance during the quarter, with consolidated sales volumes rising by 2.4%, supported by healthy traction in international markets. While domestic volumes remained subdued

mes remained subdued due to prolonged rainfall across India, the International operations grew by 9%. Performance in international territories continued to be healthy, with South Afr

1.9%

e months ending 30th September 2025. Revenue from operations, net of excise and GST, increased by 1.9% YoY in Q3 CY2025 to the level of Rs. 48,966.5 million from earlier level of Rs. 48,046.8 million

Rs. 48,966.5 million

evenue from operations, net of excise and GST, increased by 1.9% YoY in Q3 CY2025 to the level of Rs. 48,966.5 million from earlier level of Rs. 48,046.8 million in Q3 CY2024. Consolidated sales volume grew by 2.4% t

Rs. 48,046.8 million

ST, increased by 1.9% YoY in Q3 CY2025 to the level of Rs. 48,966.5 million from earlier level of Rs. 48,046.8 million in Q3 CY2024. Consolidated sales volume grew by 2.4% to the level of 273.8 million cases from 2

273.8 million

evel of Rs. 48,046.8 million in Q3 CY2024. Consolidated sales volume grew by 2.4% to the level of 273.8 million cases from 267.5 million cases in the same period last year, reflecting stable overall performanc

267.5 million

n in Q3 CY2024. Consolidated sales volume grew by 2.4% to the level of 273.8 million cases from 267.5 million cases in the same period last year, reflecting stable overall performance even as heavy rainfall

Rs. 178.84

9%, led by a strong performance in South Africa. Net realization per case stood at the level of Rs. 178.84 in Q3 CY2025 compared to Rs. 179.62 in Q3 CY2024, owing to a higher mix of packaged drinking water

Rs. 179.62

outh Africa. Net realization per case stood at the level of Rs. 178.84 in Q3 CY2025 compared to Rs. 179.62 in Q3 CY2024, owing to a higher mix of packaged drinking water in international markets. CSD const

74%

Y2024, owing to a higher mix of packaged drinking water in international markets. CSD constituted 74%, NCB 4%, and Packaged Drinking Water 22% of total sales volumes during the quarter. In 9M CY2025,

ing to a higher mix of packaged drinking water in international markets. CSD constituted 74%, NCB 4%, and Packaged Drinking Water 22% of total sales volumes during the quarter. In 9M CY2025, mix of

22%

inking water in international markets. CSD constituted 74%, NCB 4%, and Packaged Drinking Water 22% of total sales volumes during the quarter. In 9M CY2025, mix of Low sugar / No sugar products was

Guidance — 20 items

Raj Gandhi

opening

“By passing on the full benefit of the rate reduction to consumers, we expect to drive category expansion and support sustained demand growth over time.”

Ravi Jaipuria

“Obviously, since they are in the market there will be some minor effect temporarily, but we believe that in the long term this is going to be very healthy for the industry.”

Ravi Jaipuria

“We think we are also reasonably prepared and whatever the market requires, we will be in the market and expand the market.”

Ravi Jaipuria

“As soon as the weather changes we can grow in double digits, for example if you look at October, for the next quarter, we are growing in double digits.”

Ravi Jaipuria

“We are looking for expansion and whenever we get an opportunity, we will be ready to go forward with it.”

Ravi Jaipuria

“Going forward with the backward integration and all, we see South Africa will become an important part of our territory in Africa.”

Ravi Jaipuria

“But as soon as we see a break in weather, things look positive and there's no reason why we should not expect double-digit growth going forward.”

Ravi Jaipuria

“We will be importing the product right now, give us a little bit time to understand it.”

Ravi Jaipuria

“We will keep launching new products, we have launched the energy drink, “A Rush” now and will be launching some of the new products in the next year.”

Ravi Jaipuria

“This year we have added the energy drink and next year we will add 1 or 2 more products.”

Risks & concerns — 5 flagged

But what would be the impact of competition?

— Vivek Maheshwari

The challenge earlier was in Zimbabwe, the prices had gone up and consumption dropped slightly because of the sugar tax.

— Ravi Jaipuria

So, do you see the weather headwind continuing in the near-term or it's much lower than what you faced in the last couple of quarters?

— Arnab Mitra

But now It has bounced back and for next year, we don't see any challenge in the teen’s growth.

— Ravi Jaipuria

It is just the test marketing, it's very difficult to say how many cases.

— Ravi Jaipuria

Q&A — 14 exchanges

Hi, good afternoon, team. Firstly, on the base business, I know the season was quite bad and there are a lot of industries which have seen the impact. But what would be the impact of competition? Are you seeing anything on the ground? I know we ask you this question every quarter, but it's an important parameter from our perspective. So, I would love to know your thoughts?

Ravi Jaipuria

We believe competition is good and healthy and will only grow the market for all of us. Obviously, since they are in the market there will be some minor effect temporarily, but we believe that in the long term this is going to be very healthy for the industry. They have woken all of us up and we are becoming more attentive and making sure we are going to the market more often than we were going before. It's a very healthy sign for the country because we are at such low per capita consumption that in the next 5 to 10 years, this market may double or triple, no one knows. There is huge room and

My first question is on the GST transition impact. Number 1 company, HUL, called out impact in Q2 and even in October month. So, if you could clarify in your GST impacted segments, what was the kind of impact you have seen in both Q2, which is, say, September quarter and in October month?

Ravi Jaipuria

Well, it affected slightly for a few days in the September quarter because a lot of people could not initially understand it and downsized their stock levels. But we were able to make sure that the goods were sent to them after the GST transition date. Sure. My second question is on the international volume growth, which is decent at 9%. So, if you could clarify how things are shaping up, which geographies are doing really well there? And second is, on this Carlsberg tie-up, how big is the opportunity? It's looking really interesting. So, what made you go into this kind of tie-up? And how big

Sir, two questions. Firstly, in India, can you give us a sense of which categories and brands and how they performed during the quarter? Particularly with some of these, sort of, fruit beverages or fruit-based drinks and the milk beverages. Any sort of pickup we've seen post the GST cuts? And second, on the Alcobev piece again, in Africa, this Carlsberg partnership, is it applicable for every country that you operate in Africa or it's only a few countries to start with?

Ravi Jaipuria

First, the GST cut for the quarter has only been for eight days, so it's too early to say. But overall, we had a tremendous growth in our hydration category “Nimbooz”. We've grown more than 50% in that. We had an excellent growth in our value- added dairy also, which has grown at about 100%. We see both these categories still firing and doing extremely well. If the weather was slightly favorable, they would have done much better than what they have. And regarding your question of Africa, as of now we have got most of the Southern Africa understanding with them, starting with one or two countri

Thanks for taking my question. My first question was on the Carlsberg arrangement. If you could just help us understand what is the kind of commercial terms of the transaction? We know that beer is a capex heavy business. Would it involve you doing end-to-end everything in the markets that you're testing? Or it's just distribution and somebody else does the manufacturing? So, just wanted some sense on the commercial terms that you think here.

Ravi Jaipuria

Well, initially, it's distribution, we are importing the products and testing the market. And as soon as we feel comfortable, then we will go to the back end. Sure. And sir, the other question was in these markets where you've got the Carlsberg distribution arrangement, does Carlsberg have any existing business or these are white spaces for the brand right now? Mostly white spaces, some small imports happening, but practically white spaces. Sure. And sir, my last question was on the Kenya subsidiary incorporation. The purpose of it is to long term look at potentially Pepsi's business here or a

Hi. Sir, on Carlsberg arrangement, you mentioned distribution rights are for southern part of African continent. I wanted to check what is the size of beer market in these regions? And eventually, over a period of time, what is the market share that we are targeting in these regions?

Ravi Jaipuria

Well, we think the size of beer market is as large as soft drink or even bigger in most of these African markets. Most of the African countries are very large beer consumption markets. It is too early to say what market share we will hold, as we have not even started testing these markets. Almost 1,500 million cases would that be a correct ballpark estimate? It's too early and we don't want to do any guesswork. We will be importing the product right now, give us a little bit time to understand it. Sure, sir. Sir, in terms of new products, globally, there are some fruit-based carbonates like ch

Hi, sir. My question is on the international business. We have done a sales growth of around 7% in the international this quarter. And this includes some part of foods also. So, organically, it might be a tad lower. Our ambition, and I think, what the investors also, sort of, expect is like early to mid-teens kind of revenue growth from the international business. So, is there anything, any particular geography, etcetera, which is pulling this down? Or is that expectation itself not, sort of, reasonable?

Ravi Jaipuria

No, we think double digits in mid-teens is realistic for Africa. Two things which pulled down this year, especially in the last 2 quarters. One was Zimbabwe where the sugar tax came and because of which the prices had gone up and the volumes dipped initially. We have since recovered and September onwards, we are back to double-digit growth in Zimbabwe. The other was DRC, where initially we have made some errors which affected us for the last few months. But now It has bounced back and for next year, we don't see any challenge in the teen’s growth. Right, sir, right. Sir, not just Africa subcon

My question is regarding the Sting. How is the Sting performance in this quarter? Is it outperforming the overall growth on consol level?

Ravi Jaipuria

All our carbonated beverages, including energy drink, is performing similar. Everything in our portfolio got affected by the weather, but as the weather has opened up, things have started coming back to normal. Okay. So, you said Nimbooz and dairy product is growing at higher pace. Nimbooz and value-added-dairy are doing exceptionally well. These are small categories, and won't overall affect the numbers much. Hopefully, going forward next year, both these categories should become large. In other income, what is the forex amount? About Rs. 100 crore. Okay. And what was the previous year same q

Just a follow-up question on your aspiration to or potential for an India AlcoBev business. Sir, you were present in this industry until 2015. I think you had a JV with AB InBev. And then you probably decided to exit that space. I think in the last 10 years, sector has become a little more challenging from a regulatory standpoint and competitive standpoint also. So, now what's the thought process here in terms of how should we think about, will it be some JV or partnership with a large existing player that you are considering? Or would you be acquiring smaller brands or local players and build

Ravi Jaipuria

First of all, the positive side is we understand this business inside out. We ran this business for a long time and now we are looking to expand our categories and growth. We are looking at it in Africa to start with. We understand the beer business. We have enough people in the system who know the business from back end to front end. We are going to start with it and initially start by importing it. And once we get the right success and we feel that it's the right thing to go forward, we will take it forward to a higher level. So, small steps as of now, nothing big? Well, it depends. It could

We are in-fact over prepared Capacity-wise. We have expanded in the last 2 years, however this year the growth has not happened. So, our capacities are very much intact and even if we grow 50%, we have enough capacities to fulfil that. Onkar Ghugardare: Okay. And as far as the acquisition of some companies are concerned, I mean in which areas you are looking for it and how to use the capital which you have?

Ravi Jaipuria

We are looking at expanding in Africa that is the first part. With Pepsi itself, we started snacks in Morocco, and we are expanding quite rapidly in South Africa. Also, we have started looking at the beer category in Africa. In India also, we have not stopped expansion as we feel the growth is going to be quite substantial. I mean, this beer business, alcohol business, which you are starting, trying to test in African region. I mean, how capital intensive it is? Is it similar to the beverage industry? It is similar like beverage industry. We are going to test the market and are not going to ju

From PepsiCo's point of view, we think that refranchising bottling operations is gaining a lot more attention, and there seems to be urgency too, right? So, I just want to understand your thought process, what can be some of the opportunities if PepsiCo were to advance on refranchising some of its own operations?

Ravi Jaipuria

There's nothing to refranchise. We own most of it here. We own more than 90%. No, outside. I mean, globally Yes. Globally, we are always keen. We are always open to expand with Pepsi. We've always told Pepsi, any place which is available, we are more than happy to expand with them subject to their operations making sense for us. All right. And then, maybe on the AlcoBev opportunity, right? Can you share some thoughts on how does this help expand and strengthen your client relationship and distribution capabilities, right? And then probably on the timeline, when should we start expecting some o

Sir, there are various global ADR reports suggesting that PepsiCo has increased the price of concentrate by 10%. So, was it related to only US or other markets as well?

Ravi Jaipuria

We have no idea what you're saying. We don't know where they have increased the prices, as PepsiCo don't discuss with us. Just wanted to confirm that it was only for the US or any other markets as well. I'll just check one more time. Thanks. As soon as we know, we'll let you know. Yes. And can you, sir, just highlight when was the last revision in the concentrate prices? I think, it was long back. But if you can just give us a sense. We have an understanding with them. It's based on our selling price. If we increase our selling price, they automatically get a share of it.

Just one question on the AlcoBev side. I know or we understand that it's too early to ask on the revenue and profit side. But the number of cases you can just tell us, how many volumes that you are targeting on the side.

Ravi Jaipuria

It is just the test marketing, it's very difficult to say how many cases. It's going to be imported and test marketed.

Just a couple of questions. One is on South African market. Could you share what is our market share in that currently?

Ravi Jaipuria

We are around 17% to 18%, approximately. Okay. And I mean, is there any thoughts on what should be our target market share in, let's say, 2 to 3 years? We would love to reverse it if possible. We are trying our best, it's a new market for us and we have got a tough competitor. As long as we can grow in double digits, we believe that is a very healthy growth. Yes. Absolutely, sir. On the subsidiaries, so CY2024, a few of the subsidiaries were negative or were loss at the net level. As of Q3 or as of 9 months, are all the subsidiaries profitable now on net level? Consolidated, they are all at pr

Thank you. I hope we have been able to answer all your questions satisfactorily. Should you need any further clarifications or would like to know more about the company, please feel free to contact our Investor Relations team. Thank you once again for your interest and support and for taking the time to join us on this call. Look forward to interacting with you soon. Thank you very much. Disclaimer: This is a transcription and may contain transcription errors. The transcript has been edited for clarity. The Company takes no responsibility of such errors, although an effort has been made to ens

Management

Speaking time

Ravi Jaipuria

Moderator

Vivek Maheshwari

Percy Panthaki

Abneesh Roy

Devanshu Bansal

Rajit Aggarwal

Arnab Mitra

Sumant Kumar

Jaykumar Doshi

Opening remarks

Anoop Poojari

Good afternoon, everyone, and thank you for joining us on Varun Beverages' Q3 CY2025 Earnings Conference Call. We have with us Mr. Ravi Jaipuria, Chairman of the company; Mr. Varun Jaipuria, Executive Vice Chairman and Whole-Time Director; and Mr. Raj Gandhi, President and Whole-Time Director of the company. We will initiate the call with opening remarks from the management, following which we'll have the forum open for a question-and-answer session. Before we begin, I would like to point out that some statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the results presentation shared with you earlier. I would now request Mr. Ravi Jaipuria to make his opening remarks.

Ravi Jaipuria

Good afternoon, everyone, and thank you for joining us on our earnings conference call. I hope you've had a chance to review our results presentation for the third quarter and nine months ended September 2025. We have delivered a steady performance during the quarter, with consolidated sales volumes rising by 2.4%, supported by healthy traction in international markets. While domestic volumes remained subdued due to prolonged rainfall across India, the International operations grew by 9%. Performance in international territories continued to be healthy, with South Africa delivering another quarter of strong growth. In South Africa, we see significant potential to further strengthen our market position, and we continue to put in place the building blocks to support sustained growth in the region. Our ongoing backward integration initiatives across key locations are driving higher efficiency and operation resilience. Further, in line with our growth strategy, we are incorporating a wholl

Raj Gandhi

Thank you, Mr. Chairman. Good afternoon, and a warm welcome to everyone on the call today. I will take you through the financial and operational performance for the third quarter and nine months ending 30th September 2025. Revenue from operations, net of excise and GST, increased by 1.9% YoY in Q3 CY2025 to the level of Rs. 48,966.5 million from earlier level of Rs. 48,046.8 million in Q3 CY2024. Consolidated sales volume grew by 2.4% to the level of 273.8 million cases from 267.5 million cases in the same period last year, reflecting stable overall performance even as heavy rainfall persisted across India through the quarter. India volumes were largely flat, while international volumes grew by 9%, led by a strong performance in South Africa. Net realization per case stood at the level of Rs. 178.84 in Q3 CY2025 compared to Rs. 179.62 in Q3 CY2024, owing to a higher mix of packaged drinking water in international markets. CSD constituted 74%, NCB 4%, and Packaged Drinking Water 22% of

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