Simultaneously, VBL reported a robust financial performance for the third quarter ended September 2025 (Q3 CY2025), with profit after tax (PAT) rising 18.5% year-on-year (YoY). The earnings were supported by lower finance costs and higher other income, even as EBITDA margins came under pressure from rising expenses. Together, the expansion update and earnings growth are likely to keep investor interest elevated in the counter.
Strategic partnership
As part of its diversification and global growth strategy, VBL signed an exclusive distribution agreement with Carlsberg Breweries A/S for select African markets. Through this partnership, certain African subsidiaries of VBL will test-market Carlsberg beer. The company views this as an opportunity to tap into the growing global demand for ready-to-drink (RTD) and alcoholic beverages. It plans to expand further into the beer, wine, whisky, rum, and vodka segments.Further bolstering its Africa presence, VBL is setting up a wholly owned subsidiary in Kenya to handle the manufacturing, distribution, and sale of beverages in the region. The move builds on the company’s existing operations in Zimbabwe, Zambia, and Morocco.
In India, VBL also announced a joint venture — White Peak Refrigeration Pvt. Ltd. — with Everest International Holdings Ltd., to manufacture visi-coolers and refrigeration equipment to support its retail expansion.
Q3 CY2025 results
VBL posted a consolidated PAT of Rs 745.2 crore for Q3 CY2025, up 18.5% from Rs 628.8 crore in the same quarter last year. Revenue from operations rose 1.9% YoY to Rs 4,896.6 crore. The profit growth was aided by lower finance costs, higher other income, favourable currency movement, and better returns from deposits.EBITDA for the quarter slipped marginally by 0.3% YoY to Rs 1,147.3 crore. While gross margins improved by 119 basis points to 56.7%, driven by improved cost efficiencies in international operations, EBITDA margins declined 53 basis points to 23.4% due to higher operating expenses. Despite the margin pressure, the company’s financial performance and expansion efforts highlight steady strategic progress.
Brokerage views
Goldman Sachs: Buy | Target price: Rs 615
Goldman Sachs maintained a Buy rating on Varun Beverages and raised its target price to Rs 615 from Rs 590. The brokerage noted that India revenue returned to double-digit growth in October, reflecting a strong rebound in domestic demand. It highlighted the company’s product expansion with the premium ‘A-Rush’ energy drink and the introduction of Sting in cans. Goldman Sachs also viewed the exclusive Carlsberg beer partnership in Africa as a strategically positive move and marginally raised its CY2026–27 earnings estimates, citing a strong outlook for both India and Africa.
Morgan Stanley: Overweight | Target price: Rs 600
Morgan Stanley retained its Overweight rating on VBL with a target price of Rs 600, noting that the Carlsberg partnership adds a promising new growth vertical. The brokerage expects India operations to maintain double-digit growth, while the African business could grow in the low to mid-teens. It also highlighted strong traction in the ‘Adrenaline Rush’ energy drink and continued strength in the Nimbooz brand. The firm remains upbeat on the company’s expansion plans, GST-related benefits, and ability to scale internationally.
Nuvama: Buy | Target price: Rs 595
Nuvama maintained a Buy rating on Varun Beverages, revising its target price to Rs 595 from Rs 606. It described Q3 CY2025 results as weak but in line with expectations and cited the company’s strategic entry into the alcoholic beverage segment through its Carlsberg pilot in Africa as a key long-term positive.
The brokerage highlighted a 2.4% YoY growth in consolidated volumes, though India volumes remained flat. Revenue grew 1.9% YoY, while EBITDA was largely unchanged from the year-ago quarter. Nuvama trimmed its earnings per share (EPS) estimates for CY2025–27 by about 5% and advised monitoring the potential impact of a La Niña-linked winter on sales.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)