Strong volume growth and rich valuations for Varun Beverages' stock

Revenue grew 29 per cent Y-o-Y to Rs 7,330 crore which was below expectations. Volume grew to 402 million cases, up 28 per cent

Varun Beverages (VBL) reported reasonable results and saw the stock sold down sharply followed by a sharp recovery. VBL reported a revenue growth of 29 per cent year-on-year (Y-o-Y) in the April-June quarter (Q2) of CY24, (the company has a January-December financial year) while volume growth was up 28 per cent Y-o-Y. This was because of domestic volume growth of 23 per cent due to higher capacity and the heat wave. But international volume was flat with a transition to zero-sugar in Zimbabwe responsible for the poor results. Realisation was flat Y-o-Y at Rs 179 per case.