Varun Beverages on July 30 reported a consolidated net profit of Rs 1,262 crore for the June quarter, a growth of 26 percent from the same quarter of the previous financial year at Rs 1,005.42 crore. As per the company's statement, this growth was driven by volume growth and improved margins.
The gross margins improved by 222 bps to 54.7 percent from 52.5 percent during Q2CY2024. According to the company, this growth is attributed to the timely procurement and storage of PET chips to avail pricing benefits, focus on reducing sugar content and lightweight packaging.
In terms of volume growth, India volumes grew by 22.9 percent and International volumes (before BevCo volumes) were almost flat primarily on account of volumes in Zimbabwe getting affected due to the portfolio transition to zero sugar without affecting profits.
Consolidated sales volume grew 28.1 percent to 401.6 million cases in Q2CY24 from 313.5 million cases in Q2 CY2023. This includes 28 million cases from BevCo during the quarter.
PepsiCo bottler’s revenue came in at Rs 7,333.6 crore, rising 28.3 percent, the company said in a regulatory filing as compared to Rs 5,699.7 crore in Q2CY24.
Varun Beverages is a key player in the beverage industry and one of the largest franchisees of PepsiCo (outside the US), following the January-December financial year.
EBITDA increased by 31.8 percent to Rs 1,991.2 crore YoY from Rs 1,511.o2 crore in the same period a year ago. EBITDA margin improved by 74 bps to 27.7 percent in Q2CY24, led by higher gross margins.
"With strong performance in a key quarter, we are on track to deliver healthy double-digit growth in this calendar year. India remains a high-demand market with massive growth potential, driven by a growing
consuming class and a young population," said Ravi Jaipuria, Chairman, Varun Beverages Limited.
He added that to capitalise on demand, they are focused on strengthening our infrastructure, distribution network, and product portfolio. He expects sustainable value to the shareholders with a focus on strategic growth and leveraging new opportunities in both India and international markets.
PepsiCo's bottling franchise partner announced a stock split in the ratio of 2:5 along with an interim dividend of Rs 1.25 per share for its shareholders while declaring its results for the June quarter.
"This is subject to the approval of equity shareholders of the Company. This is intended for wider retail participation," Jaipuria said.
On BSE, Varun Beverages Limited was trading at a decline of 15.80 percent at Rs 1668 on July 30 at 10:44 AM.
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