Varun Beverages Q3 Results: Cons PAT rises 32% YoY on strong sales, EBITDA growth

Varun Beverages on Monday reported robust earnings for the quarter ended September, with the consolidated net profit rising nearly 32% year-on-year (YoY) to Rs 501 crore, on the back of strong topline and operational performance.

Consolidated revenue, net of excise duty, grew by nearly 22% YoY to Rs 3,871 crore, led by a healthy growth in volumes and realisations.

Despite the strong earnings growth, the stock wiped the gains and fell 0.7% to Rs 946.10 due to profit-booking. Ahead of the earnings, the stock had touched a one-month high of Rs 965.70.

Consolidated sales volumes grew by 15.4% in the third quarter of the calendar year to 220 million cases, led by a double-digit growth in both Indian and international markets, the company said.

Varun Beverages, which is PepsiCo’s second-largest franchisee outside the US, follows the calendar year.

Net realization increased by 5.6% to Rs 176.3 per case, driven by an increase in realization per case primarily in the international markets.

Operating profit, calculated as earnings before interest, taxes, depreciation, and amortisation (EBITDA), increased by 26% on year to Rs 882 crore.Gross margins improved by 163 bps to 55.3% in the quarter, primarily due to the softening of PET chip prices. Driven by higher gross margins and operational efficiencies, the EBITDA margin improved by 79 bps to 22.8%.

“We have achieved notable progress on the operational front by making significant investments to develop both greenfield and brownfield manufacturing facilities throughout India,” said Ravi Jaipuria, chairman, Varun Beverages.

As part of its commitment to diversify and enhance the portfolio, the company is also enhancing the capacity for juices and value-added dairy beverages to align with the evolving consumer demands, Jaipuria said.

“As we intensify our foothold in India and expand our reach in Africa, our strategic initiatives are aimed towards strengthening our position in the global beverage industry,” he added.

For the nine months ended September, the net revenue grew 22% YoY to Rs 13,375 crore, EBITDA increased by 29% to Rs 3,191 crore, and net profit was higher by over 33% to Rs 1,958 crore.

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