Varun Beverages Q4 Net Profit Surges to Rs 726 Crore, Interim Dividend Announced

Varun Beverages, the Indian bottling giant for PepsiCo products, reported a stellar financial performance for the fourth quarter of FY25, with its net profit rising 35 percent year-on-year to Rs 726 crore, propelled by strong volume growth and robust summer demand.

The company’s revenue for the quarter touched Rs 5,680 crore, marking a 29 percent increase compared to the same period last year, slightly surpassing analysts’ projections. The Q4 performance benefitted from the early onset of summer across India, which contributed significantly to the rise in beverage consumption.

Dividend Declaration and Key Dates

The board of directors has announced an interim dividend of Rs 0.50 per share. The record date to identify eligible shareholders is May 7, and the dividend payout is scheduled for May 9.

Stock Market Response

Despite the strong financials, Varun Beverages' stock declined by 1.35 percent, trading at Rs 521.80 per share on the BSE post-announcement. While the results beat expectations, market experts believe the muted investor reaction may stem from valuation concerns or profit booking, as the strong Q4 was largely anticipated.

Currently, the stock is trading above its 5-day, 10-day, 20-day, 30-day, and 50-day moving averages but remains below the 100-day, 150-day, and 200-day averages. Varun Beverages shares are still down over 22 percent from their 52-week high of Rs 682.84, recorded in July 2024.

Growth Drivers Behind Q4 Surge

The standout performance was underpinned by a 30 percent growth in consolidated volumes, driven by the full-quarter contributions from both BevCo and the recently acquired DRC business. Domestic demand witnessed double-digit volume growth, thanks to favorable weather patterns and increased consumer spending during peak season.

Analyst Forecasts and Market Sentiment

Brokerages had largely anticipated an upbeat quarter. Kotak Institutional Equities forecast a 30 percent revenue growth and a significant 684 basis points sequential margin expansion. On the other hand, JM Financial listed Varun Beverages as a top sector pick, though its revenue forecast of Rs 20,007 crore appeared to be an annualized estimate rather than quarterly.

Despite outperforming on operational metrics, market analysts believe that much of the positive sentiment was already priced into the stock, leading to subdued investor reaction on the bourses.

PepsiCo Partnership and Strategic Outlook

As PepsiCo’s largest bottling partner in India, Varun Beverages continues to expand its footprint across domestic and international markets. The integration of new acquisitions like BevCo and DRC is expected to strengthen its distribution network and increase market penetration in the coming quarters.

With India entering the peak summer season, the beverage giant is expected to maintain strong momentum in Q1 FY26, backed by increased rural demand, rising per capita beverage consumption, and strategic pricing adjustments.

Conclusion

Varun Beverages’ Q4 performance underscores the company’s operational strength and market leadership in India’s soft drink sector. While short-term stock movement reflects market caution, the long-term fundamentals remain strong. With volume growth, strategic acquisitions, and a robust summer demand outlook, Varun Beverages is well-positioned for continued success.