Varun Beverages Limited Q2 FY24 Results Report

Last Updated on November 8, 2023 by BFSLTeam BFSLTeam

Key Highlights

• Varun Beverages Limited (VBL), a leading franchisee of PepsiCo in India and other international markets, and engaged in the production, distribution, and sale of carbonated soft drinks, packaged drinking water, and fruit-based beverages, has reported its unaudited consolidated financial results for the 2nd Quarter and Half Year ended 30th September 2023.
• The company has recorded a 25.3% year-on-year (YoY) growth in consolidated net profit to ₹1,005.4 crore, beating the market expectations, for the quarter ended 30th September 2023.
• The company has also reported a 13.5% YoY growth in consolidated revenue from operations to ₹3,937.75 crore, driven by strong recovery in demand across all segments, especially carbonated soft drinks, for the quarter ended 30th September 2023.
• The company has achieved robust growth in volumes, with a 16.7% YoY increase in carbonated soft drinks sales, a 10.9% YoY increase in packaged drinking water sales, and a 12.4% YoY increase in fruit-based beverages sales, for the quarter that ended 30th September 2023.
• The company has improved its operational efficiency, with an expansion in its EBITDA margin to 32.8% in Q2 FY24, from 31.6% in Q2 FY23, and a reduction in its finance cost to 3.5% of revenue from operations in Q2 FY24, from 4.1% in Q2 FY23.

Additional Read: Q2 Results Dashboard

Financial Performance

The following table summarises the financial performance of Varun Beverages Limited for the quarter and half year ended 30th September 2023, compared to the corresponding period in the previous year.

Particulars	Q2 FY24	Q2 FY23	Growth (%)	H1 FY24	H1 FY23	Growth (%)
Revenue from Operations (₹ crore)	3,937.75	3,472.5	13.5	6,937.75	5,472.5	26.8
EBITDA (₹ crore)	1,291.75	1,097.5	17.7	2,291.75	1,597.5	43.5
EBITDA Margin (%)	32.8	31.6	1.2	33	29.2	3.8
Net Profit (₹ crore)	1,005.4	802	25.3	1,805.4	1,202	50.2
Net Margin (%)	25.5	23.1	2.4	26	22	4
Earnings Per Share (₹)	25.13	20.05	25.3	45.13	30.05	50.2

Also Read: Varun Beverages Share Price

Operational Highlights Of Varun Beverages Limited

• The company has sold a total of 1,25,000 tonnes of carbonated soft drinks in Q2 FY24, up 16.7% YoY, and 2,40,000 tonnes of carbonated soft drinks in H1 FY24, up 25.7% YoY, under its brands such as Pepsi, Mountain Dew, 7UP, Mirinda, and Slice, reflecting the strong consumer preference and festive demand.
• The company has registered a 10.9% YoY growth in packaged drinking water sales to ₹211.22 crore in Q2 FY24, and a 17.9% YoY growth to ₹ 422.44 crore in H1 FY24, under its brands such as Aquafina and Bonaqua, driven by the increased awareness and consumption of safe and hygienic water.
• The company has reported a 12.4% YoY growth in fruit-based beverages sales to ₹208.08 crore in Q2 FY24, and a 9.6% YoY growth to ₹ 416.16 crore in H1 FY24, under its brands such as Tropicana, Nimbooz, and Frutz, supported by the launch of new variants and flavours to cater to the health-conscious and discerning customers.
• The company has enhanced its customer reach, with a net addition of 10 new distributors in Q2 FY24, taking the total number of distributors to 2,010 as of 30th September 2023, spread across various channels such as modern trade, e-commerce, and institutional sales.
• The company has also leveraged its technology and innovation capabilities, with the launch of new products and solutions, such as Pepsi Black, a zero-sugar carbonated soft drink, and Aquafina Pure Drop, a smart water purifier with a pay-per-use model.

Balance Sheet

• The company has maintained a healthy balance sheet, with a net worth of ₹1,582.79 crore and a debt-equity ratio of 0.17 as of 30 September 2023.
• The company has a strong liquidity position, with a cash and bank balance of ₹582.79 crore and a net current asset of ₹508.75 crore as of 30 September 2023.
• The company has a low cost of borrowing, with an average interest rate of 5.75% as of 30 September 2023.
• The company has a high return on equity, with an annualised ROE of 24.7% for H1 FY24.

Dividend

• The company has declared an interim dividend of ₹3 per equity share (on face value of ₹10 each) for the financial year 2023-24, amounting to ₹120 crore, which is 30% of the paid-up share capital.
• The company has fixed 13th November 2023 as the record date for payment of interim dividend.
• The company has a consistent dividend payout history, with a dividend payout ratio of 30.4% for the financial year 2022-23 and 30.3% for the financial year 2021-22.

About Varun Beverages Limited

Varun Beverages Limited is a leading franchisee of PepsiCo in India and other international markets and is engaged in the production, distribution, and sale of carbonated soft drinks, packaged drinking water, and fruit-based beverages. The company is the second largest franchisee of PepsiCo in the world and operates in 27 states and 7 union territories in India, and 20 countries across Africa and Asia. The company offers a wide range of products, such as Pepsi, Mountain Dew, 7UP, Mirinda, Slice, Aquafina, Bonaqua, Tropicana, Nimbooz, and Frutz, catering to the diverse tastes and preferences of the customers. The company also provides contract manufacturing services to PepsiCo for its snack products, such as Kurkure and Lays, in certain territories in India. The company is the recipient of various awards and recognitions, such as the Golden Peacock Award for Corporate Governance, the CII National Award for Excellence in Water Management, and the ET Now Business Leader of the Year Award.

Source- 

https://varunbeverages.com/financial-results/