Varun Beverages reported 59.7% increase in consolidated net profit to Rs 257.90 crore in Q3 CY2021 from Rs 161.47 crore in Q3 CY2020.
Revenue from operations grew by 33% YoY to Rs 2,398.16 crore during Q3 CY2021, primarily on account of robust volume growth over last year and higher realization on a consolidated basis.
Realization per case improved by 3.6% to Rs 156.4 per case in Q3 CY2021 driven by higher realizations in international territories.
Total sales volumes were up 28.4% YoY at 153.3 million cases in Q3 CY2021 as compared to 119.5 million cases in Q3 CY2020.
Gross margins declined by 278 bps YoY during Q3 CY2021 primarily because of increase in pet prices in India.
EBITDA increased by 29.9% to Rs. 494.66 crore in Q3 CY2021 from Rs 380.79 crore in Q3 CY2020. EBITDA margin was at 20.6% in Q3 CY2021, despite lower gross margins as higher volumes assisted the company achieve better operating leverage.
Finance cost in Q3 CY 2021 declined by 26.4% to Rs. 42.69 crore from Rs. 57.96 crore in Q3 CY2020. The company continues to reduce its debt and lower its average cost of borrowing, Varun Beverages said.
Ravi Jaipuria, chairman, Varun Beverages, said, The results were supported by strong volume growth of 28% driven by uptick in demand across markets. Even on a 2-year CAGR basis, our organic volumes were higher by 11%.
On the profitability front, we were able to maintain a healthy EBITDA margin of 21% during the quarter backed by higher operating leverage despite an increase in raw material prices. While the industry practice is that any input cost increase is passed on, we have also worked on our cost efficiencies. We are continuously monitoring the input prices to sustain our margin that will enable us to further strengthen our position in the beverage industry.
Following easing of lockdown restrictions and improving macro trends, we witnessed enhanced traction in the domestic demand environment which exceeded pre-pandemic levels. Out-of-home consumption registered an uptick driven by increase in travel and resumption in offices.
On the whole, we remain optimistic on the demand environment, given improving macros, onset of festive season and a growing sense of normalcy across domestic and international markets.
The board of Varun Beverages today approved a proposal for setting up a new plant of the company for manufacturing of plastic preforms and plastic closures at Kathua, Jammu & Kashmir. It also approved a proposal for setting up a new plant of the Company for manufacturing of juice, carbonated soft drinks and packaged drinking water at Baruni, Begusarai, Bihar.
Varun Beverages is a key player in beverage industry and one of the largest franchisee 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. VBL has been granted franchises for various PepsiCo products across 27 States and 7 Union Territories in India along with franchise for territories of Nepal, Sri Lanka, Morocco, Zambia and Zimbabwe.
The scrip shed 0.41% to currently trade at Rs 819.15 on the BSE.
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