DRC plant to start commercial production next quarter
The greenfield plant in DRC is expected to start commercial production in the next quarter (Q2 CY24).
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Varun Beverages · forward-looking guidance across the available source record.
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expansion
Cheetos production in Morocco by May 2025
Varun Beverages Morocco will start manufacturing, marketing, and packaging Cheetos in Morocco by May 2025.
Debt amortization in a couple of months
Management expects to amortize the majority of incremental debt taken for BevCo acquisition and CapEx in the next couple of months.
Long-term margin guidance unchanged
Despite gross margin expansion, management maintains the same long-term margin guidance, citing one-off factors.
Double-digit volume growth for CY2025
Management expects to continue double-digit volume growth for the full year, supported by capacity expansion and market penetration.
India EBITDA margin guidance of at least 21%
Management maintains that India EBITDA margins will be at least 21%, with potential improvement from backward integration and new plants.
Capex guidance of INR 3,100 crore for CY2025
Total capex for the year is guided at INR 3,100 crore, with INR 900 crore yet to be spent.
South Africa margin improvement to ~14% for the year
Management aims to maintain South Africa EBITDA margins at around 14% for the full year, up from 10.8% at acquisition.
Double-digit volume growth expected for next 5-10 years
Management expects the Indian market to continue growing at double digits for the next 5-10 years, supported by favorable demographics and rising consumption.
Capex less than INR 500-600 crore in CY2026
Capital expenditure for the year is expected to be low, under INR 500-600 crore, as existing capacity is sufficient.
Targeting 500,000 new outlet additions in CY2026
The company plans to add approximately 500,000 new outlets this year, expanding distribution reach from a base of ~4 million.
Double-digit volume growth in H2 CY2024
Management expects continued double-digit volume growth in India and consolidated for the second half of the calendar year.
CapEx of ₹3,600 crore for CY2024
Net capitalization CapEx for 2024 remains at ₹3,600 crore, primarily for greenfield and brownfield expansions.
CapEx of ₹2,500-2,600 crore for CY2025 season
Planned capitalization of ₹2,500-2,600 crore for the 2025 season, mainly for greenfield facilities in India and snack food manufacturing in Africa.
Snack food revenue target of ~$100M in 2-3 years
Management expects snack food business in Zimbabwe, Zambia, and Morocco to generate close to $100 million in revenue within the next couple of years.
India capex limited to INR 600-700 crore over next two years
Management indicated that major capex in India will be minimal for the next 1-2 years, with only INR 600-700 crore planned, primarily for maintenance and solar energy.
Capacity utilization at ~70% provides headroom for 2 years
Current capacity utilization is around 70%, giving enough room for growth without significant new capacity additions in India for the next two years.
International expansion via M&A and organic capex
Management is actively looking for acquisitions and expansion in international markets, with capex focused on South Africa, DRC, Morocco, and Zimbabwe.
Snacks plant in Zimbabwe to start in October 2025
The snacks plant in Zimbabwe is expected to commence production in October-November 2025, following the Morocco plant which started in June 2025.
DRC capacity to more than double by next year
Current DRC capacity of ~35M cases will be more than doubled with expansion at existing plant and a new facility, expected to commission in early 2025 and mid-2025.
Three snack plants in Africa to commence operations next year
Snack plants in Zimbabwe, Zambia, and Morocco are expected to start commercial production in 2025, with potential revenue of ~$100M at full capacity.
rPET plant to be operational by Q2 2025
First rPET plant under construction will produce enough preforms to meet government mandate of 30% rPET usage.
QIP of INR 7,500 crore for debt reduction and acquisitions
Funds will be used to reduce net debt (~INR 6,000 crore), support expansion, and create a war chest for strategic acquisitions.
Double-digit growth expected in India going forward
Management expects double-digit growth in India as weather normalizes, citing October double-digit recovery.
International business to return to early-to-mid teens growth
Management expects international revenue growth to return to 13-15% from next quarter, driven by recovery in Zimbabwe and DRC.
New energy drink 'Adrenaline Rush' launched at INR 60
Launched in four cities at a medium price point of INR 60, targeting the energy drink segment.
Carlsberg beer distribution to start in Southern Africa
Exclusive distribution agreement with Carlsberg for Southern Africa; initial test marketing via imports.
Double-digit volume growth in India
Management expects to sustain double-digit volume growth in India, supported by outlet expansion and market penetration.
Capacity expansion of ~25% in 2025
Production capacity will increase by about 25% in 2025, with new plants commissioned before the season.
Snack foods revenue of $25-30M in Morocco
Snack business in Morocco expected to generate $25-30 million in CY25, with plant commissioning in June.
South Africa margins to improve with backward integration
Margins in South Africa will improve as backward integration and general trade expansion take effect over the next 1-2 years.
Double-digit volume growth in India for CY2026
Management expects double-digit volume growth in India for CY2026, assuming normal weather, after a weather-impacted CY2025.
India EBITDA margin maintained near 26%
Management aims to maintain India EBITDA margins close to the CY2025 level of ~26%, though formal guidance remains 22-23%.
Twizza acquisition to be margin accretive for South Africa
The acquisition of Twizza in South Africa is expected to be margin accretive for BevCo, with owned assets and solar power reducing costs.
Low CapEx in CY2026 except Twizza and brewery
No major CapEx planned in India; international CapEx limited to brownfield in South Africa and a greenfield brewery for Carlsberg in Africa.
Capex below ₹600 crore in CY2026
Management guided capex of less than ₹500-600 crore for the year, as existing capacity is sufficient to support 50% volume growth.
Double-digit volume growth expected for 5-10 years
Management expressed confidence in sustained double-digit volume growth in India over the next 5-10 years, driven by favorable demographics and market expansion.
Distribution outlet addition of ~0.5 million in CY2026
Management plans to add approximately half a million new outlets this year, up from the current base of ~4 million.