Improved profitability was driven by lower finance cost in Q2 CY 2021 which declined by 36.9% to Rs. 46.78 crore from Rs. 74.19 crore in Q2 CY2020. Finance cost declined due to lowering of average cost of borrowing and reduction in total debt.

Net revenues increased by 49.4% YoY to Rs 2,449.85 crore during the quarter, primarily because of robust volume growth over last year and marginal increase in realizations per case.

Total sales volume increased by 45.4% YoY to 152.3 million cases in Q2 CY2021 as compared to 104.8 million cases in Q2 CY2020, led by strong growth in the month of Apr'21 compared to low base of previous year same month and a steady recovery in the month of Jun'21, despite the second wave of pandemic and related lockdowns, which led to a de-growth in the month of May'21.

Realization per case improved marginally by 2.8% to Rs 160.8 per case in Q2 CY2021 led by higher realizations in international territories partially offset by higher mix of water.

CSD constituted 78%, juice 7% and packaged drinking water 15% of total sales volumes in Q2 CY2021.

Gross margins declined by 128 bps YoY during Q2 CY2021 primarily due to change in product mix and marginal increase in raw material prices.

EBITDA rose 51.1% to Rs 570.8 crore in Q2 2021 from Rs 377.69 crore in Q2 2020. EBITDA margin improved marginally YoY to 23.3% in Q2 CY2021 from 23% in Q2 CY2020 even after a 128 bps decline in gross margins as the company was able to sustain the cost optimization measures implemented last year.

Profit before tax in Q2 2021 stood at Rs 419.65 crore, up by 130.8% from Rs 181.86 crore in Q2 2020. Tax expense increased by 159.4% YoY to Rs 100.85 crore during the period under review.

Net debt stood at Rs 2,549.2 crore as on 30 June 2021 as against Rs 3,015.8 crore as on 31 December 2020. Debt:Equity ratio stood at 0.63x as on 30 June 2021 and Debt:EBITDA ratio stood at 1.69x for the trailing twelve months EBITDA.

During H1 CY 2021, the net organic capex of approximately Rs 190 crore including forex adjustments was primarily towards expansion in India, Morocco and Zimbabwe.

Working capital days increased marginally to approximately 24 days as on 30 June 2021 from 20 days as on 30 June 2020, primarily due higher stock of pet resin/preform inventory stocked to take the advantage of lower pricing at the start of the year.

The board of director's have recommended an interim dividend of Rs 2.5 per share. Total cash outflow would be approximately Rs 108.26 crore.

Ravi Jaipuria, chairman, Varun Beverages Limited said, “We have delivered an encouraging set of results during the quarter, despite a soft operating environment due to pandemic-induced lockdowns and restrictions. While we registered strong sales in the month of April, May witnessed moderate sales on account of the disruptions.

Further, as lockdowns and curbs started easing from June onwards, we saw faster recovery in demand, which assisted growth in the quarter.

Overall, we have delivered a healthy performance, with a topline growth of 49.4% YoY. The higher growth rate is on account of robust volume growth over a lower base of previous year as well as marginal increase in realizations.

As we look ahead, momentum in demand and consumption should further strengthen with higher vaccination drives, improving economic indicators and supportive macros such as good monsoons.”

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.