Varun Beverages saw a big jump in profits for Q2 CY24. The company’s consolidated net profit increased by 26.04%, reaching ₹1,252.60 crore compared to ₹993.81 crore in Q2 CY23. This impressive growth was mainly due to higher sales volumes and better profit margins.
Revenue from operations, excluding excise duty, went up by 28.25% year-on-year, hitting ₹7,196.86 crore. The profit before tax also saw a rise of 26.85%, reaching ₹1,663.07 crore from ₹1,311.09 crore in the same quarter last year.
The company did a great job improving its gross margins, which increased by 222 basis points to 54.7%. This was because of smart buying and storing of PET chips, which helped with pricing. They also focused on reducing sugar content and making packaging lighter, which helped their margins.
EBITDA for the quarter grew by 31.8%, reaching ₹1,991.22 crore from ₹1,511.02 crore, with the EBITDA margin improving by 74 basis points to 27.7%. Sales volumes increased significantly, with consolidated volumes rising by 28.1% to 401.6 million cases, including around 28 million cases from BevCo.
Despite the consolidation of BevCo, which resulted in flat net realization per case, the company’s overall performance remained strong.
For the first half of the year, the consolidated net profit grew by 25.79% to ₹1,789.87 crore, and revenue from operations rose by 21.15% to ₹11,514.18 crore.
What Are Varun Beverages’ Future Plans and Recent Developments?
Ravi Jaipuria, chairman of Varun Beverages, expressed satisfaction with the strong performance, highlighting the significant sales volume growth of 28.1%, primarily driven by a 22.9% increase in India.
He noted that expanded capacities, an enhanced distribution network, and a strong summer season were key contributors to this growth. However, international markets remained flat due to a seasonally weak quarter in Africa.
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Varun Beverages: quarterly net profit rose 26.04% to Rs 1,252.60 cr. Interim dividend announced: Rs 1.25 per share, with the record date as 9 Aug. The company board also…
Looking forward, Varun Beverages announced an expansion in its partnership with PepsiCo. The company will start manufacturing, distributing, and selling “Simba Munchiez” in Zimbabwe by October 2025 and in Zambia by April 2026. This follows a recent agreement to produce Cheetos in Morocco by May 2025.
Also, the company started commercial production of carbonated soft drinks and packaged drinking water at a new facility in the Democratic Republic of Congo (DRC), highlighting the region’s growth potential.
Varun Beverages is on track to achieve healthy double-digit growth for the calendar year, driven by high demand in India. The company plans to further strengthen its infrastructure, distribution network, and product portfolio to meet this demand.
The company’s board announced an interim dividend of ₹1.25 per share for the financial year 2024, with a record date set for August 9, 2024, and payment from August 13, 2024. The board also approved a sub-division of equity shares, pending shareholder approval.
Varun Beverages is a major player in the beverage industry and one of PepsiCo’s largest franchisees outside the USA. The company produces and distributes a number of carbonated and non-carbonated beverages, including packaged drinking water under PepsiCo trademarks.
They have franchises for various PepsiCo products across 27 states and 7 union territories in India, as well as in Nepal, Sri Lanka, Morocco, Zambia, and Zimbabwe.
Despite the strong performance, the company’s share price fell by 6.25%, currently trading at ₹1,578.60 on the BSE.
Know the detailed overview of Varun Beverages, here.
Key Points
- Varun Beverages’ net profit rose by 26.04% to ₹1,252.60 crore in Q2 CY24.
- Revenue from operations increased by 28.25% year-on-year to ₹7,196.86 crore.
- Profit before tax climbed 26.85% to ₹1,663.07 crore.
- Gross margins improved by 222 basis points to 54.7%.
- EBITDA grew by 31.8% to ₹1,991.22 crore, with an EBITDA margin of 27.7%.
- Sales volumes rose by 28.1% to 401.6 million cases.
- H1 CY24 net profit grew by 25.79% to ₹1,789.87 crore, with revenue rising by 21.15% to ₹11,514.18 crore.
- Expansion plans include manufacturing “Simba Munchiez” in Zimbabwe and Zambia and producing Cheetos in Morocco.
- Started production of carbonated soft drinks and water in the Democratic Republic of Congo.
- Declared an interim dividend of ₹1.25 per share for FY24.
- Approved a sub-division of equity shares, pending shareholder approval.
- Share price fell by 6.25%, trading at ₹1,578.60 on the BSE.
People May Ask
1. How much did Varun Beverages’ net profit increase in Q2 CY24?
Varun Beverages’ consolidated net profit rose by 26.04% to ₹1,252.60 crore in Q2 CY24, compared to ₹993.81 crore in the same quarter last year.
2. What were the primary factors driving the profit growth?
The growth in profit was primarily driven by increased sales volumes and improved profit margins, supported by strategic procurement and operational efficiencies.
3. How did revenue from operations change in Q2 CY24?
Revenue from operations, excluding excise duty, surged by 28.25% year-on-year, reaching ₹7,196.86 crore.
4. What improvements were seen in gross margins?
Gross margins improved by 222 basis points to 54.7%, mainly due to the timely procurement and storage of PET chips, reducing sugar content, and lightening packaging.
5. How did EBITDA perform in this quarter?
EBITDA grew by 31.8% to ₹1,991.22 crore, with the EBITDA margin improving by 74 basis points to 27.7%.
6. What was the sales volume for Q2 CY24?
Consolidated sales volume rose by 28.1% to 401.6 million cases, which includes around 28 million cases from BevCo.
7. How did net realization per case fare during this period?
Net realization per case remained flat due to the consolidation of BevCo, which has a lower realization per case for its own brands.
8. What are Varun Beverages’ future expansion plans?
Varun Beverages plans to expand its partnership with PepsiCo by manufacturing and distributing “Simba Munchiez” in Zimbabwe by October 2025 and in Zambia by April 2026. They also plan to produce Cheetos in Morocco by May 2025 and have started commercial production in the Democratic Republic of Congo (DRC).
9. What is the company’s outlook for the year?
The company is optimistic about achieving healthy double-digit growth for the year, driven by high demand in India and plans to strengthen its infrastructure, distribution network, and product portfolio.
10. Has the company declared any dividends?
Yes, the company announced an interim dividend of ₹1.25 per share for the financial year 2024, with a record date set for August 9, 2024, and payment from August 13, 2024.
11. What recent corporate actions did the board approve?
The board approved a sub-division of existing equity shares, subject to shareholder approval, to enhance liquidity and make shares more affordable for retail investors.
12. What happened to Varun Beverages’ share price recently?
Despite the strong financial performance, Varun Beverages’ share price fell by 6.25%, currently trading at ₹1,578.60 on the BSE.
