The improved profitability was driven by high growth in revenue from operations, improvement in margins, and transition to a lower tax rate in India, the company said.

Net revenue from operations during the quarter grew by 32.5% YoY to Rs 3,176.6 crore, on account of robust volume growth over last year and higher realization on a consolidated basis.

Net realization per case improved by 6.8% to Rs 167 per case in Q3 CY22, driven by a higher mix of smaller SKUs (250ml) especially the energy drink - Sting which has a higher net realization, and its mix is increasing in the sales volumes.

Sales volumes in India grew by 22.1% in Q3 CY22 to 148 million cases and in international markets grew by 31.3% to 42 million cases. Total volume for the quarter 190 million cases, up 24% YoY.

Gross margins for Q3 CY22 increased by 90 bps to 53.7% from 52.8% in Q3 CY21, despite the inflationary raw material environment.

EBITDA increased by 41.3% to Rs 699 crore in Q3 CY22 and EBITDA margin improved by 138 bps to 22% in Q3 CY22 led by higher realization and operating leverage from increased sales volume.

Ravi Jaipuria, chairman, Varun Beverages, said: “Our India business has delivered a solid organic volume growth of 22% led by a favorable demand environment and strong performance of our energy drink - Sting. In addition, healthy double-digit sales volume growth of 31% in our key international markets further assisted performance during the quarter.

Post Covid related setbacks over the last two years, we are now increasingly improving our presence by expanding our distribution reach across markets. This will help us gain a larger share in the growing market.

On the product portfolio front, we are pleased to share that Sting continues to perform exceedingly well across geographies. Similarly, our launches in the value added Dairy segment are seeing healthy consumer response and we remain confident of improving contribution from these new launches, going ahead.

Overall, the demand environment for the beverage industry has been robust and we are witnessing a healthy offtake in India as well as in our international markets. The festive season in Q4 is expected to further aid consumption trends in this calendar year.”

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.