Varun Beverages Q4 Earnings: 40% Profit Surge, ₹680 Target Set by Brokerages

Varun Beverages reported a 40% YoY rise in net profit to ₹185.1 crore in Q4 CY24, with revenue surging 40.3% to ₹3,818 crore. Brokerages like Motilal Oswal and Morgan Stanley maintained a bullish outlook, setting target prices of ₹680 and ₹674, respectively. The company became net debt-free and continues expanding in India and international markets through acquisitions, capacity growth, and distribution enhancements.

 

CONTENTS:

• Varun Beverages Q4 Earnings Review: Strong Growth, Positive Outlook from Brokerages
• Varun Beverages Q4 Results: Net Profit Rises 40% to ₹185 Crore, Dividend Declared

Varun Beverages Q4 Earnings: 40% Profit Surge, ₹680 Target Set by Brokerages

Varun Beverages Q4 Earnings Review: Strong Growth, Positive Outlook from Brokerages

Varun Beverages Q4 Earnings: 40% Profit Surge Varun Beverages concluded the year with impressive performance, demonstrating strong volume growth both in India (11%) and international markets, driven by acquisitions and greenfield capacity expansion. This solid performance has led brokerages to maintain a positive stance on the stock.

 

Brokerage Outlook & Price Targets: Varun Beverages Q4 Earnings: 40% Profit Surge

Motilal Oswal has reaffirmed its BUY rating on Varun Beverages, highlighting the company’s growth momentum. The brokerage expects a compound annual growth rate (CAGR) of 12% in revenue, 11% in EBITDA, and 17% in profit after tax (PAT) over CY24-26, while largely keeping CY25 and CY26 earnings estimates unchanged.

Key growth factors identified by Motilal Oswal include:

• Increased market penetration in newly acquired African territories
• Stable domestic growth
• Expansion in production capacity and distribution (with 10% annual outlet additions)
• Rising adoption of refrigeration in rural and semi-rural areas

 

The brokerage has assigned a valuation of 55x CY26 estimated earnings per share (EPS), arriving at a target price of ₹680.

Global investment firm Morgan Stanley has also maintained an overweight rating, setting a target price of ₹674. The firm noted that the management remains optimistic about volume growth and margins for CY25, adding that the company has not been significantly impacted by competition from Campa Cola in India. Morgan Stanley emphasized that the market already accommodates a 20% share of lower-priced “B brands,” and that Varun Beverages still has significant distribution expansion opportunities, with over 4 million outlets currently served.

 

Financial Performance: Varun Beverages Q4 Earnings: 40% Profit Surge

For Q4 CY24, Varun Beverages posted a 40.3% increase in net profit, reaching ₹185.1 crore compared to ₹131.9 crore in Q4 CY23. Revenue from operations also surged 40.3% to ₹3,818 crore, up from ₹2,731 crore in the same quarter of the previous year.

EBITDA recorded a 38.7% growth, reaching ₹580 crore compared to ₹418 crore in Q4 CY23. The company’s board has approved a final dividend of ₹0.50 per share.

 

Debt-Free Status & Expansion Strategy: Varun Beverages Q4 Earnings: 40% Profit Surge

Varun Beverages has successfully become net debt-free by utilizing proceeds from its Qualified Institutional Placement (QIP) issue to prepay outstanding debts.

Chairman Ravi Jaipuria highlighted key achievements and future plans, stating that the company achieved 12.5% sales growth in South Africa in its first year, along with expanded general trade distribution and record placement of visi-coolers. Future growth strategies include:

• Backward integration initiatives
• Market penetration and capacity expansion
• Investments in technology and sustainability
• Strengthening last-mile distribution with more visi-coolers

With a strong foundation, the company remains confident in sustaining long-term value creation.

 

Industry Positioning: Varun Beverages Q4 Earnings: 40% Profit Surge

Varun Beverages is a key franchisee of PepsiCo, producing and distributing a wide range of carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs), including packaged drinking water under PepsiCo-owned trademarks.

 

Varun Beverages Q4 Results: Net Profit Rises 40% to ₹185 Crore, Dividend Declared

PepsiCo franchisee Varun Beverages reported a 40.2% year-on-year (YoY) increase in its consolidated net profit, reaching ₹185.14 crore for the quarter ending December 31, 2024. In the same period last year, the company had posted a net profit of ₹131.97 crore.

 

Revenue & Financial Performance

• Revenue from operations surged 39.78% to ₹3,817.61 crore, compared to ₹2,730.98 crore in Q4 of the previous year.
• EBITDA grew 39% to ₹580 crore, up from ₹418 crore a year ago.
• EBITDA margin remained stable at 15.7%.

 

Following the earnings announcement, Varun Beverages’ stock was trading 2.47% lower at ₹540 per share on the NSE as of 12:52 PM.

 

Dividend Announcement

The company’s Board of Directors declared a ₹0.50 per share dividend, subject to shareholder approval at the upcoming Annual General Meeting (AGM). The record date for the dividend has yet to be announced.

 

Management Insights & Expansion Plans

Chairman Ravi Jaipuria expressed satisfaction with the company’s strong performance in CY24, emphasizing its expansion into new territories such as South Africa, Namibia, Botswana, Mozambique, and Madagascar. Additionally, greenfield operations were launched in the Democratic Republic of Congo (DRC).

 

Key highlights from the company’s growth strategy:

• India volume growth of 11.4%, while consolidated volume surged 23.2%.
• South Africa sales volumes grew 12.5% in its first year of operations.
• Increased general trade distribution while reducing dependence on modern trade channels.

Varun Beverages also entered a share purchase agreement to acquire PepsiCo’s business in Tanzania and Ghana.

 

Investment & Production Expansion

During Q4 CY24, the company successfully raised ₹7,500 crore through a Qualified Institutional Placement (QIP).

Varun Beverages also commissioned three new greenfield production plants with backward integration in:

• Supa, Maharashtra
• Gorakhpur, Uttar Pradesh
• Khordha, Odisha

 

Additionally, the company expanded backward integration facilities at its Guwahati plant in India and at sites in Morocco, Zambia, and Zimbabwe.

With robust domestic and international growth, Varun Beverages continues to strengthen its market presence while expanding production and distribution capabilities.