Varun Beverages to distribute ‘Carlsberg’ in Africa: Analysts decode impact | Markets News
Varun Beverages share price today
Varun Beverages shares witnessed slight profit booking on Thursday, falling 2.2 per cent on the BSE in the intraday trade, as analysts remained cautiously optimistic on the company’s outlook following its September quarter (Q3CY25) results update.
At 11:33 AM, Varun Beverages’ stock was trading 1.7 per cent lower at ₹487 per share, recovering marginally from its intraday low of ₹484.4 per share. By comparison, the BSE Sensex index was down 0.3 per cent.
Varun Beverages Q3 results highlights:
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Varun Beverages reported a consolidated revenue growth of 1.9 per cent year-on-year (Y-o-Y) to ₹4,896.7 crore, driven by a 2.4 per cent increase in consolidated volume to 273.8 million cases. -
The company’s International markets grew 9 per cent Y-o-Y led by South Africa, while India volume remained largely flat owing to extended rainfall across regions. -
VBL’s gross margin expanded 119 basis points Y-o-Y to 56.7 per cent, aided by a favourable product mix and enhanced backward integration in international territories. However, Ebitda margin contracted 53bps Y-o-Y to 23.4 per cent. -
Its Ebitda fell 0.3 per cent Y-o-Y and 42.6 per cent Q-o-Q to ₹1,147.4 crore. -
Net profit came at ₹741.2 crore, up 19.2 per cent Y-o-Y, but down around 44 per cent Q-o-Q.
Varun Beverages enters liquor market
Varun Beverages has announced its foray in the alcoholic beverage segment and has incorporated a wholly-owned subsidiary in Kenya.
The WOS will have an exclusive tie-up with ‘Carlsberg’ for the distribution of its product in Africa, under the pilot project.
VBL has also formed a joint venture with Everest International for visi-coolers in India.
According to analysts, VBL indicated synergies in terms of manpower, distribution, and retail of beer in African nations, and emphasized on prudent expansion, commencing with distribution arrangements initially, followed by manufacturing investments.
“Incumbent player Delta has a scale of $0.6 billion (beer category), with a healthy growth profile of ~20 per cent and a strong margin profile of ~20 per cent. We are confident about good execution by VBL in the alco-bev category, in the African region, aided by share gains in the soft-drink category in Zimbabwe, which is also Delta’s stronghold,” Emkay Global said.
Varun Beverages stock outlook
Emkay Global Financial Services | Buy | Target price: ₹575
VBL’s double-digit volume growth, as seen in Q3CY25, has stayed intact in October 2025, allaying Street concerns around potential market-share loss.
The management highlighted its focus on market-share protection, with readiness to participate even on the magic price-point of ₹10, if need be.
Notably, VBL’s growth is being led by differentiated categories like hydration/dairy (up 50-100 per cent), wherein competition is limited.
The brokerage remains confident about VBL’s outperformance (vs FMCG peers), with return of double-digit volume growth.
Nuvama Institutional Equities | Buy | Target: ₹595
The brokerage has retained its ‘Buy’ rating, but trimmed the share price target from ₹606 amid rising competition. It observed that VBL’s parent company, PepsiCo, cited rising competition in India for the first time, along with adverse weather conditions, as the key reasons for its weak Q3CY25.
This comes in the backdrop of Reliance Consumer claiming double-digit market share in key states (as per Nielsen) for the first time. Tata Consumer’s RTD (ready-to-drink) volume, meanwhile, is likely to grow 19 per cent Y-o-Y, better than other summer categories.
“October marked double-digit growth, but a potentially harsher winter (owing to La Niña) remains a key factor to monitor. We are cutting CY25E–27E EPS by ~5 per cent,” it said.
ICICI Securities | Hold | Target: ₹500
Echoing guarded views on Varun Beverages, analysts at ICICI Securities said VBL’s partnership with Carlsberg, and the JV with Everest International for visi-coolers in India expand the long-term growth canvas for the company.
Nonetheless, it has cut its estimates by 6 per cent for CY25-26E, assuming revenue, Ebitda, and net profit CAGR of 12 per cent, 12 per cent, and 18 per cent, respectively, over CY24-27E.
It maintained its ‘Hold’ rating, revising the target price to ₹500 (from ₹450), seeking comfort from the management’s confidence on the structural growth supported by low per-capita consumption, capacity expansion and diversified international exposure over the long-term.
Motilal Oswal Financial Services | Buy | Target: ₹580
VBL has changed its memorandum to include the business of manufacturing, producing, processing, brewing, distilling, refining, blending, bottling, storing, packaging, selling, distributing, trading, dealing, marketing, moving, preserving, stocking, importing, and exporting Ready To Drink (RTD) and other alcoholic beverages in India and abroad.
This has given MOFSL hopes that the company could witness improvement in its earnings, aided by a scale-up in the international market, driven by South Africa.
That apart, strengthening of on-ground execution in the Indian market; scale up of the snacking business from CY26 onwards, backed by the operationalisation of the Morocco and Zimbabwe markets in H2CY25; an expanding product portfolio (via ‘Adrenaline Rush’); and the ongoing investments in capacity expansion, distribution, and cold chain infrastructure bodes well, it said.
Axis Securities | Buy | Target: ₹565
The pilot tie-up with Carlsberg brand in Southern Africa, through an exclusive distribution agreement with Carlsberg Breweries A/S, capitalises on Varun Beverages’ existing infrastructure and a supportive regulatory landscape, enabling cost-efficient expansion without major incremental investment.
“Foray into the alcoholic beverage market Management represents a measured, test-based entry into the beer segment, aligning with the company’s strategy to expand in growth markets. We expect the company to sustain strong momentum over the medium to long term and maintain our BUY rating on the stock, valuing it at 38x September-2027 EPS,” it said.