Revenue from operations (excluding excise duty) increased 10.9% YoY to Rs 4,317.31 crore in Q1 CY24.

Profit before tax jumped 24.8% to Rs 715.75 crore in Q1 CY24 as compared with Rs 573.37 crore in Q1 CY23.

Gross margins improved by 385 bps to 56.3% from 52.4% during Q1 CY2024 primarily due to reduced PET prices as well as the focus on reducing sugar content and light-weighting of packaging. Approximately 46% of our consolidated sales volumes come from Low sugar / No sugar product

During the quarter, EBITDA jumped 23.9% to Rs 988.76 crore from Rs 798.03 crore posted in corresponding quarter last year. EBITDA margin improved by 240 bps to 22.9% in Q1 CY2024, led by higher gross margins and increased realization.

Consolidated sales volume grew by 7.2% to 240.2 million cases in Q1 CY2024 from 224.1 million cases in Q1 CY2023.

In Q1 CY2024, net realization per case increased by 3.5% to Rs 179.7 on account of improving product mix in India and higher contribution of International markets which have higher realization per case.

Ravi Jaipuria, Chairman , Varun Beverages, said, “We achieved a consolidated sales revenue growth of 10.9% with a break-up of volume growth of 7.2% and net realization per case growth of 3.5% in Q1, reflecting an improved product mix in India and higher contributions from international markets. Overall, EBITDA increased by 23.9% year on year and PAT increased by 24.9%.

Further, our sustainability efforts, including the focus on reducing sugar content, removal of corrugated pads in packaging, and light-weighting of packaging material have started showing results by increase in gross margins.

To fulfil our growth commitment in our core market i.e. India, we commenced three new greenfield facilities located in Supa, Maharashtra; Gorakhpur, Uttar Pradesh; and Khordha, Odisha. This expansion is designed to meet the rising demand for beverages in India and support our long-term growth trajectory.

Furthermore, Varun Beverages Morocco SA, a wholly-owned subsidiary, has entered into an Exclusive Snacks Appointment Agreement to manufacture and package Cheetos in Morocco, by May 2025. This agreement complements our existing distribution of PepsiCo’s snack portfolio, marking another step forward in our strong symbiotic partnership.

In nutshell, we have fueled three growth engines which shall gradually and consistently contribute to revenue and profitability growth in the Company. First growth engine is the South Africa’s combined territory with Lesotho, Eswatini, Namibia, Botswana, Mozambique and Madagascar. Second growth engine is entry into new territory of DRC where PepsiCo is not present at all as of now, the commercial production here from our new state of the art greenfield plant is expected to start from the next quarter. The third growth engine is entry into snack food production by May 2025 in Morocco."

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.

The counter fell 1.73% to Rs 1,438 on the BSE.