Results     01-Nov-22
Analysis
Varun Beverages
NP up 58.67%
For the quarter ending sept 2022, consolidated net sales (including other operating income) of Varun Beverages has increased 32.46% to Rs 3176.62 crore compared to quarter ended sept 2021.Operating profit margin has jumped from 20.63% to 22%, leading to 41.31% rise in operating profit to Rs 699.00 crore.  Raw material cost as a % of total sales (net of stock adjustments) increased from 45.37% to 45.62%.   Purchase of finished goods cost fell from 1.52% to 1.17%.   Employee cost decreased from 11.17% to 9.71%.   Other expenses rose from 21.19% to 21.69%.   

Other income fell 71.24% to Rs 10.62 crore.  PBIDT rose 33.49% to Rs 709.62 crore.  Provision for interest rose 6.09% to Rs 45.29 crore.  

PBDT rose 35.88% to Rs 664.33 crore.  Provision for depreciation rose 10.58% to Rs 153.14 crore.  

Profit before tax grew 45.88% to Rs 511.19 crore.  Share of profit/loss were nil in both the periods.  Provision for tax was expense of Rs 115.7 crore, compared to Rs 92.51 crore.  Effective tax rate was 22.63% compared to 26.40%.

Minority interest decreased 18.64% to Rs 14.45 crore.  Net profit attributable to owners of the company increased 58.67% to Rs 381.04 crore.  

Promoters’ stake was 63.90% as of 30 September 2022 ,compared to 64.89% as of 30 September 2021 .  Promoters pledged stake was 0.04% as of 30 September 2022


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

Net sales (including other operating income) of Varun Beverages has increased 54.59% to Rs 10958.91 crore.  Operating profit margin has jumped from 20.41% to 22.64%, leading to 71.42% rise in operating profit to Rs 2,480.61 crore.  Raw material cost as a % of total sales (net of stock adjustments) increased from 44.53% to 47.36%.   Purchase of finished goods cost fell from 1.73% to 1.32%.   Employee cost decreased from 10.50% to 8.12%.   Other expenses fell from 22.93% to 20.73%.   

Other income fell 55.87% to Rs 29.6 crore.  PBIDT rose 65.78% to Rs 2510.21 crore.  Provision for interest fell 5.95% to Rs 138.64 crore.  

PBDT rose 73.52% to Rs 2371.57 crore.  Provision for depreciation rose 8.84% to Rs 437.53 crore.  

Profit before tax grew 100.47% to Rs 1,934.04 crore.  Share of profit/loss were nil in both the periods.  Provision for tax was expense of Rs 465.45 crore, compared to Rs 251.29 crore.  Effective tax rate was 24.07% compared to 26.05%.

Minority interest increased 27.88% to Rs 45.91 crore.  Net profit attributable to owners of the company increased 109.97% to Rs 1,422.68 crore.  

Promoters’ stake was 63.90% as of 30 September 2022 ,compared to 64.89% as of 30 September 2021 .  Promoters pledged stake was 0.04% as of 30 September 2022


Full year results analysis.

Net sales (including other operating income) of Varun Beverages has increased 36.79% to Rs 8823.23 crore.  Operating profit margin has jumped from 18.63% to 18.75%, leading to 37.67% rise in operating profit to Rs 1,654.64 crore.  Raw material cost as a % of total sales (net of stock adjustments) increased from 41.57% to 44.48%.   Purchase of finished goods cost rose from 1.43% to 1.85%.   Employee cost decreased from 13.76% to 11.29%.   Other expenses fell from 24.66% to 23.83%.   

Other income rose 83.74% to Rs 67.93 crore.  PBIDT rose 39.05% to Rs 1722.57 crore.  Provision for interest fell 34.29% to Rs 184.7 crore.  Loan funds declined from Rs 2,693.48 crore as of 31 December 2020 to Rs 2,441.82 crore as of 31 December 2021.  Inventories rose to Rs 1,448.09 crore as of 31 December 2021 from Rs 928.80 crore as of 31 December 2020.  Sundry debtors were lower at Rs 221.25 crore as of 31 December 2021 compared to Rs 241.80 crore as of 31 December 2020.  Cash and bank balance rose to Rs 336.62 crore as of 31 December 2021 from Rs 190.05 crore as of 31 December 2020.  

PBDT rose 60.57% to Rs 1537.87 crore.  Provision for depreciation rose 0.48% to Rs 531.26 crore.  Fixed assets increased to Rs 6,783.15 crore as of 31 December 2021 from Rs 5,894.00 crore as of 31 December 2020.  Intangible assets declined from Rs 581.43 crore to Rs 24.23 crore.  

Profit before tax grew 134.62% to Rs 1,006.61 crore.  Share of profit/loss were nil in both the periods.  Provision for tax was expense of Rs 260.56 crore, compared to Rs 5.23 crore.  Effective tax rate was 25.88% compared to 1.44%.

Minority interest increased 83.88% to Rs 52.00 crore.  Net profit attributable to owners of the company increased 110.96% to Rs 694.05 crore.  

Equity capital increased from Rs 288.69 crore as of 31 December 2020 to Rs 433.03 crore as of 31 December 2021.  Per share face Value remained same at Rs 10.00.  

Promoters’ stake was 64.89% as of 31 December 2021 ,compared to 66.40% as of 31 December 2020 .  Promoters pledged stake was 0.04% as of 31 December 2021

Cash flow from operating activities increased to Rs 1,231.42 crore for year ended December 2021 from Rs 1,011.99 crore for year ended December 2020.  Cash flow used in acquiring fixed assets during the year ended December 2021 stood at Rs 834.80 crore, compared to Rs 559.67 crore during the year ended December 2020.  

Other Highlights

In Q3 CY22, Indial sales volume grew by 22.1% to 14.8 crore cases and in international markets grew by 31.3% to 4.2 crore cases.

CSD constituted 70%, JBD 5% and Packaged Drinking Water 25% in Q3 CY2022.


Management Comments :
Mr. Ravi Jaipuria, Chairman, Varun Beverages Limited said, “We are pleased to report yet another strong quarter, delivering a net revenue growth of 32% and a PAT growth of 53% YoY. 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. We are confident that we can sustainably deliver healthy volume growth across all product categories going forward and further strengthen our market position in the beverage industry.“

Varun Beverages : Consolidated Results
 Quarter endedYear to DateYear ended
Particulars202209202109Var.(%)202209202109Var.(%)202112202012Var.(%)
Net Sales (including other operating income)3,176.622,398.1632.4610,958.917,088.9054.598,823.236,450.1436.79
OPM (%)22.0020.63138 bps22.6420.41222 bps18.7518.6312 bps
OP699.00494.6641.312,480.611,447.0871.421,654.641,201.8737.67
Other Inc.10.6236.93-71.2429.6067.07-55.8767.9336.9783.74
PBIDT709.62531.5933.492,510.211,514.1565.781,722.571,238.8439.05
Interest45.2942.696.09138.64147.41-5.95184.70281.10-34.29
PBDT664.33488.9035.882,371.571,366.7473.521,537.87957.7460.57
Depreciation153.14138.4910.58437.53401.998.84531.26528.70.48
PBT511.19350.4145.881934.04964.75100.471006.61429.04134.62
Share of Profit/(Loss) from Associates00-00-00-
PBT before EO511.19350.4145.881934.04964.75100.471006.61429.04134.62
EO Income00-00-0-66.53-
PBT after EO511.19350.4145.881934.04964.75100.471006.61362.51177.68
Taxation115.792.5125.07465.45251.2985.22260.565.234,882.03
PAT395.49257.953.351468.59713.46105.84746.05357.28108.81
Minority Interest (MI)14.4517.76-18.6445.9135.927.885228.2883.88
Net profit381.04240.1458.671422.68677.56109.97694.05329110.96
P/(L) from discontinued operations net of tax00-00-00-
Net profit after discontinued operations381.04240.1458.671422.68677.56109.97694.05329110.96
EPS (Rs)*5.873.7058.6721.9010.43109.9710.695.9978.25
* EPS is on current equity of Rs 649.55 crore, Face value of Rs 10, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
EO : Extraordinary items
Figures in Rs crore
Source: Capitaline Corporate Database


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