Return of Campa Cola is helping expand soft drink market: Varun Bev’s Jaipuria

Reliance Industries, in its recent investor presentation has noted in the perspective of its retail business that Campa Cola has gained double-digit market share in key markets in India. Coca Cola remains the market leader in the carbonated soft drink market.

Despite the heightened activity, Varun Beverages does not anticipate a major squeeze on margins. In Q1 of 2025, the company posted an EBITDA of ₹12,639.6 million, up 27.8% year-on-year, broadly aligned with net revenue growth. Gross margins in India declined by 171 basis points to 54.6%, mainly due to a higher share of lower-margin carbonated drinks and smaller pack sizes. Yet, EBITDA margins in India actually improved by 111 basis points, thanks to operational efficiencies and volume growth.

On the international front, South Africa — where VBL recently expanded — saw margins of 14.4%, a rise from around 10% before the acquisition, though still trailing India. “Margins remain lower due to a higher share of own brands,” Jaipuria explained, adding that increasing the share of PepsiCo’s portfolio will help improve profitability in that region.

VBL is also betting on backward integration and new Greenfield facilities to improve long-term margins, targeting an EBITDA margin of 21% or higher in India. “Our margin outlook is stable. We don’t expect any major dips going forward,” Jaipuria affirmed.