Pepsi India bottler Varun Beverages on Thursday reported a 26.2 per cent jump in its second-quarter profit, underpinned by improved product mix, a slide in input costs and higher volume growth.
The company, which has been making and bottling PepsiCo-branded drinks for three decades, posted a consolidated net profit of Rs 994 crore ($120.22 million) for the reported quarter ended June 30, compared with Rs 787 crore a year earlier.
Gurugram-based Varun Beverages, whose operations span six countries, is PepsiCo's No.2 franchisee outside the United States and packages and distributes beverages under Pepsi, Mirinda and Tropicana labels.
The company, which also sells Aquafina packaged bottled water, said its consolidated revenue from operations grew 13.60 per cent to Rs 5,700 crore year-on-year.
Earnings before interest, taxes, depreciation and amortisation (EBITDA), as calculated by Reuters, rose 20.78 per cent to Rs 1,511 crore year-on-year, as sales growth helped offset subdued volumes in domestic markets due to unseasonal rainfall in North India.
Also Read
Net realisation, the difference between overall sales value and cost of sales, increased 8.3 per cent year-on-year on superior product mix, and drove EBITDA margin expansion to 26.50 per cent in the June quarter from 24.93 per cent.
Crude prices fell 6.10 per cent during the quarter, and led to a 4.1 per cent slide in input costs. Still, total expenses edged higher due to inventory costs that quadrupled during the quarter.
"We remain optimistic about our full-year performance," Chairman Ravi Jaipuria said in a statement, and termed the June-quarter results "a resilient performance despite soft demand environment due to unseasonal rains".
The company approved an interim dividend of Rs 1.25 per share.
Analysts anticipate sustained earnings growth in the coming quarters, driven by the company's recent entry into value-added dairy, sports drinks segments and efforts to increase capacity in these high-margin segments.
Shares of Varun Beverages rose as much as 2.96 per cent to Rs 832.
Including session's gains, the stock climbed 24.93 per cent so far in 2023, compared with an 18.35 per cent uptick in the fast-moving consumer goods index.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)