Varun Beverages Ltd — Feb2026 Conference Call Summary

Varun Beverages Limited Q4 & CY2025 Earnings Conference Call (February 3, 2026)

(VBL follows calendar year; CY2025 = full year January-December 2025)

CY2025 Full Year Performance

• Consolidated volume: 1,213.1 million cases (+7.9% YoY)
• Revenue: INR 216,854 million (+8.4% YoY)
• Gross margin: 55.2% (vs 55.5%; broadly stable)
• EBITDA: INR 50,494 million (+7.2% YoY); margin 23.3% (vs 23.5%)
• PAT: INR 30,620 million (+16.2% YoY; driven by lower finance costs + higher other income)
• India standalone EBITDA margin: all-time high ~26%
• CRISIL: upgraded to AAA/stable

Q4 CY2025 Performance

• Volume: 237.1 million cases (+10.2%); India +10.5%; International +10%
• EBITDA: INR 6,393 million (+10.2%); PAT: INR 2,600 million (+32.9%)
• Labor code: INR 14 crores one-time; VBL 30-year anniversary event one-time costs

CY2025 Context (Weather-Impacted Year)

• Worst weather year in VBL history; unprecedented rainfall throughout India
• India volume growth for full year: only ~2.2% (vs historical ~15%+ CAGR)
• 4 new greenfield plants commissioned: Prayagraj (UP), Buxar (Bihar), Damtal (HP), Mendipathar (Meghalaya)
• Cost headwind from 4 new plants + no volume utilization; yet maintained margins at all-time high
• VBL guidance: 22-23% consolidated EBITDA; maintaining ~23.3% despite challenges

Balance Sheet

• India: net debt-free; free cash ~INR 12,250 million
• Consolidated: net debt INR 256 million (virtually nil)
• CY2025 total capex: ~INR 45,000 million (India greenfield INR 17,000M + India brownfield INR 3,000M + International INR 13,000M)

Twizza Acquisition (South Africa; announced Dec 21, 2025)

• Pending Competition Commission approval (pending at Q4 call time)
• 3 manufacturing facilities + backward integration + solar energy + owned land + owned vehicles (vs BevCo's rented facilities)
• Adds 70-80% capacity to BevCo South Africa
• CY2026 South Africa growth target: ~80%+ (organic + Twizza inorganic)
• Expected to be margin accretive; solves BevCo capacity constraint

Snack Food Business

• CY2025 revenue: ~INR 340 crores
• Morocco: manufacturing started May-June 2025; at full operations
• Zimbabwe: commissioned December 2025 (just started)
• Target: ~$100M snack business from two territories over time
• CY2026: significantly higher (Zimbabwe full year + Morocco full year)

Carlsberg (Africa) - Alcobev Entry

• Exclusive distribution agreement for southern Africa (Zambia, Zimbabwe, DRC, South Africa)
• Initially import and test market; VBL understands beer (ran AB InBev JV until 2015)
• Same go-to-market as soft drinks (trucks, distribution, retailers); capex-efficient
• Africa beer market: as large as or bigger than soft drinks; mostly monopolistic players currently
• First plant in Africa: planned CY2026; ready ~end CY2027
• MOA also amended for India optionality (RTD, low-alcohol; no near-term India plans)

India Strategy

• Pack upsizing (250ml -> 400ml): essentially done in Q4; 250ml was only 10-12% of CSD
• Rs. 10 price point: launching surgically (West Bengal + Northeast); will not exceed 5-7% of portfolio
• Upcoming launches: Nimbooz Jeera (March 2026); Ad-Rush (INR 60 energy drink; expanding)
• Capacity: VBL has 50% more capacity than what was used in CY2025; can handle 50% growth
• CY2026: double-digit India volume growth (weather-dependent)
• International: early teens revenue growth CY2026