Varun Beverages reported 26.04% jump in consolidated net profit to Rs 1,252.60 crore in Q2 CY24 as compared with Rs 993.81 crore posted in Q2 CY23.
The growth in profit after tax was driven by volume growth & improved margins.Revenue from operations (excluding excise duty) surged 28.25% YoY to Rs 7,196.86 crore in second quarter of 2024.
During the quarter, profit before tax climbed 26.85% to Rs 1,663.07 crore from Rs 1,311.09 crore recorded in same quarter last year.
Gross margins improved by 222 bps to 54.7% from 52.5% during Q2 CY24, primarily due to timely procurement and storage of PET chips to avail pricing benefits as well as the focus on reducing sugar content and light-weighting of packaging.
For Q2, EBITDA grew 31.8% to Rs 1,991.22 crore from Rs 1,511.02 crore posted in corresponding quarter last year. EBITDA margin improved by 74 bps to 27.7% in the quarter ended 30 June 2024, led by higher gross margins.
Consolidated sales volume rose 28.1% to 401.6 million cases in Q2 CY24 from 313.5 million cases in Q2 CY23. This includes around 28 million cases from BevCo during the quarter.
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Net realization per case was flat due to consolidation of BevCo (realization per case for own brands is lower) during the period under review.
On half year basis, the companys consolidated net profit grew 25.79% to Rs 1,789.87 crore on 21.15% rise in revenue from operation to Rs 11,514.18 crore in Q2 CY24 over Q2 CY23
Ravi Jaipuria, chairman of Varun Beverages, said, We are pleased to report robust performance for the second quarter of CY2024, achieving a consolidated sales volume growth of 28.1%, which includes volumes from BevCo. The impressive volume growth of 22.9% in India primarily contributed to this outstanding performance, supported by our expanded capacities, enhanced distribution network, and a strong summer season. Meanwhile, our international markets remained relatively flat, moreover it was a seasonally weak quarter for African market.
We are excited to announce further expansion in our partnership with PepsiCo, having entered into an Exclusive Snacks Franchising Appointment to manufacture, distribute, and sell "Simba Munchiez" in Zimbabwe by October 2025 and in Zambia by April 2026. This follows our recent announcement to manufacture and package Cheetos in Morocco by May 2025. These agreements complement our existing distribution of PepsiCos portfolio, marking another significant step forward in our strong, symbiotic partnership.
Additionally, we are pleased to share that we have commenced commercial production of carbonated soft drinks and packaged drinking water at our Greenfield facility in Democratic Republic of Congo (DRC). With the region representing an untapped market for PepsiCo, this expansion offers a huge growth opportunity for us.
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. To capitalize on this demand, we are focused on further strengthening our infrastructure, distribution network, and product portfolio.
Meanwhile, the company's board has announced an interim dividend of Rs 1.25 per share for the financial year 2024 and has fixed 9 August 2024 as record date for the same. The said dividend will be paid on from 13 August 2024.
Furthermore, the board of directors approved a sub-division of existing equity shares from 1 equity share with a face value of Rs 5 each, into such number of equity shares with a face value of Rs 2 each, fully paid-up, subject to shareholders approval.
Varun Beverages is a key player in beverage industry and one of the largest franchisees of PepsiCo in the world (outside USA). The company produces and distributes a wide range of carbonated soft drinks (CSDs), as well as a large selection of non-carbonated beverages (NCBs), including packaged drinking water sold under trademarks owned by PepsiCo. As on date, VBL has been granted franchises for various PepsiCo products across 27 States and 7 Union Territories in India. VBL has also been granted the franchise for various PepsiCo products for the territories of Nepal, Sri Lanka, Morocco, Zambia and Zimbabwe.
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