Operating profit margin has declined from 21.12% to 20.63%, leading to 29.91% rise in operating profit to Rs 494.66 crore.  Raw material cost as a % of total sales (net of stock adjustments) increased from 42.81% to 45.37%.   Purchase of finished goods cost rose from 0.92% to 1.52%.   Employee cost decreased from 12.90% to 11.17%.   Other expenses fell from 21.98% to 21.19%.   

Other income rose 961.21% to Rs 36.93 crore.  PBIDT rose 38.34% to Rs 531.59 crore.  Provision for interest fell 26.35% to Rs 42.69 crore.  

PBDT rose 49.83% to Rs 488.9 crore.  Provision for depreciation rose 2.90% to Rs 138.49 crore.  

Profit before tax grew 82.78% to Rs 350.41 crore.  Share of profit/loss were nil in both the periods.  Provision for tax was expense of Rs 92.51 crore, compared to Rs 30.24 crore.  Effective tax rate was 26.40% compared to 15.77%.

Minority interest increased 110.43% to Rs 17.76 crore.  Net profit attributable to owners of the company increased 56.92% to Rs 240.14 crore.  

Promoters' stake was 64.89% as of 30 September 2021 ,compared to 66.40% as of 30 September 2020 .  

For year-to-date (YTD) results analysis.

Net sales (including other operating income) of Varun Beverages has increased 38.48% to Rs 7088.9 crore.  

Operating profit margin has jumped from 20.11% to 20.41%, leading to 40.54% rise in operating profit to Rs 1,447.08 crore.  Raw material cost as a % of total sales (net of stock adjustments) increased from 41.94% to 44.53%.   Purchase of finished goods cost rose from 1.49% to 1.73%.   Employee cost decreased from 12.90% to 10.50%.   Other expenses fell from 23.48% to 22.93%.   

Other income rose 113.60% to Rs 67.07 crore.  PBIDT rose 42.70% to Rs 1514.15 crore.  Provision for interest fell 32.73% to Rs 147.41 crore.  

PBDT rose 62.33% to Rs 1366.74 crore.  Provision for depreciation rose 2.02% to Rs 401.99 crore.  

Profit before tax grew 115.39% to Rs 964.75 crore.  Share of profit/loss were nil in both the periods.  Provision for tax was expense of Rs 251.29 crore, compared to Rs 16.86 crore.  Effective tax rate was 26.05% compared to 4.42%.

Minority interest increased 127.36% to Rs 35.90 crore.  Net profit attributable to owners of the company increased 94.29% to Rs 677.56 crore.  

Promoters' stake was 64.89% as of 30 September 2021 ,compared to 66.40% as of 30 September 2020 .  

Full year results analysis.

Net sales (including other operating income) of Varun Beverages has declined 9.53% to Rs 6450.14 crore.  

Operating profit margin has declined from 20.31% to 18.63%, leading to 16.98% decline in operating profit to Rs 1,201.87 crore.  Raw material cost as a % of total sales (net of stock adjustments) increased from 40.41% to 41.57%.   Purchase of finished goods cost fell from 5.83% to 1.43%.   Employee cost increased from 11.15% to 13.76%.   Other expenses rose from 22.71% to 24.66%.   

Other income fell 13.07% to Rs 36.97 crore.  PBIDT fell 16.87% to Rs 1238.84 crore.  Provision for interest fell 9.22% to Rs 281.1 crore.  Loan funds declined from Rs 2,822.53 crore as of 31 December 2019 to Rs 2,693.48 crore as of 31 December 2020.  Inventories rose to Rs 928.80 crore as of 31 December 2020 from Rs 881.51 crore as of 31 December 2019.  Sundry debtors were higher at Rs 241.80 crore as of 31 December 2020 compared to Rs 172.56 crore as of 31 December 2019.  Cash and bank balance rose to Rs 190.05 crore as of 31 December 2020 from Rs 171.08 crore as of 31 December 2019.  

PBDT fell 18.87% to Rs 957.74 crore.  Provision for depreciation rose 8.20% to Rs 528.7 crore.  Fixed assets increased to Rs 6,451.20 crore as of 31 December 2020 from Rs 5,956.33 crore as of 31 December 2019.  Intangible assets declined from Rs 586.54 crore to Rs 24.23 crore.  

Profit before tax down 37.99% to Rs 429.04 crore.  Share of profit/loss were nil in both the periods.  Provision for tax was expense of Rs 5.23 crore, compared to Rs 224.07 crore.  Effective tax rate was 1.44% compared to 32.18%.

Minority interest increased 775.54% to Rs 28.28 crore.  Net profit attributable to owners of the company decreased 29.85% to Rs 329.00 crore.  

Equity capital stood at Rs 288.69 crore as of 31 December 2020 to Rs 288.69 crore as of 31 December 2019.  Per share face Value remained same at Rs 10.00.  

Promoters' stake was 66.40% as of 31 December 2020 ,compared to 68.43% as of 31 December 2019 .  

Cash flow from operating activities decreased to Rs 1,011.99 crore for year ended December 2020 from Rs 1,305.20 crore for year ended December 2019.  Cash flow used in acquiring fixed assets during the year ended December 2020 stood at Rs 559.67 crore, compared to Rs 753.63 crore during the year ended December 2019.  

Other Highlights

During the quarter, an amount of Rs 20 crore from the total foreign currency provisions in Zimbabwe was reversed due to corresponding reduction in the total foreign currency liability in Zimbabwe.

In Q3 CY2021, Realization per case improved by 3.6% (YoY) to Rs 156.4 per case.

Management commentary: Mr. Ravi Jaipuria, Chairman, Varun Beverages Limited said, "We are delighted to share that we have reported a robust performance during the quarter, delivering a top line growth of 33% and a PAT growth of 60% YoY. The results were supported by strong volume growth of 28% driven by uptick in demand across markets. Even on a 2-year CAGR basis, our organic volumes were higher by 11%. Wide vaccination coverage in the country along with resumption in day-to-day activities supported demand momentum in the domestic markets. On the profitability front, we were able to maintain a healthy EBITDA margin of 21% during the quarter backed by higher operating leverage despite an increase in raw material prices. While the industry practice is that any input cost increase is passed on, we have also worked on our cost efficiencies. For example, we are undertaking measures to light weight PET preforms. This will not only assist us in reducing costs in the near-term, but the benefits would be structural in nature. We are continuously monitoring the input prices to sustain our margin that will enable us to further strengthen our position in the beverage industry. In addition, we continued to reduce our debt as well as rate of interest which helped us in improving our net profit margin during the quarter. Following easing of lockdown restrictions and improving macro trends, we witnessed enhanced traction in the domestic demand environment which exceeded pre-pandemic levels. Out-ofhome consumption registered an uptick driven by increase in travel and resumption in offices. On the whole, we remain optimistic on the demand environment, given improving macros, onset of festive season and a growing sense of normalcy across domestic and international markets."