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For
the quarter ending March 2024, consolidated Net sales (including other operating income) of Varun Beverages has increased 10.90% to Rs 4317.31 crore compared to quarter ended March 2023. Operating profit margin has jumped from 20.50% to 22.90%, leading to 23.90% rise in operating profit to Rs 988.77 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 47.59% to 42.01%. Purchase of finished goods cost rose from 2.95% to 5.12%. Employee cost increased from 8.22% to 8.57%. Other expenses rose from 21.91% to 22.79%. Other income fell 17.65% to Rs 8.35 crore. PBIDT rose 23.38% to Rs 997.12 crore. Provision for interest rose 49.74% to Rs 93.69 crore. PBDT rose 21.17% to Rs 903.43 crore. Provision for depreciation rose 8.90% to Rs 187.52 crore. Profit before tax grew 24.85% to Rs 715.91 crore. Share of profit/loss was 433.33% lower at Rs -0.16 crore. Provision for tax was expense of Rs 167.77 crore, compared to Rs 134.8 crore. Effective tax rate was 23.44% compared to 23.51%. Minority interest increased 12.74% to Rs 10.71 crore. Net profit attributable to owners of the company increased 25.22% to Rs 537.27 crore. Promoters’ stake was 62.91% as of 31 March 2024 ,compared to 63.90% as of 31 March 2023 . Promoters pledged stake was 0.04% as of 31 March 2024 ,compared to 0.04% as of 31 March 2023 .
Full year results analysis.
Net sales (including other operating income) of Varun Beverages has increased 21.78% to Rs 16042.58 crore. Operating profit margin has jumped from 21.17% to 22.50%, leading to 29.46% rise in operating profit to Rs 3,609.49 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 47.47% to 43.57%. Purchase of finished goods cost rose from 1.39% to 2.87%. Employee cost decreased from 9.00% to 8.97%. Other expenses rose from 21.51% to 22.21%. Other income rose 104.27% to Rs 79.36 crore. PBIDT rose 30.49% to Rs 3688.85 crore. Provision for interest rose 44.05% to Rs 268.1 crore. Loan funds rose to Rs 5,431.31 crore as of 31 December 2023 from Rs 3,883.81 crore as of 31 December 2022. Inventories rose to Rs 2,150.53 crore as of 31 December 2023 from Rs 1,993.89 crore as of 31 December 2022. Sundry debtors were higher at Rs 359.39 crore as of 31 December 2023 compared to Rs 299.34 crore as of 31 December 2022. Cash and bank balance rose to Rs 459.86 crore as of 31 December 2023 from Rs 285.27 crore as of 31 December 2022. Investments rose to Rs 21.08 crore as of 31 December 2023 from Rs 0.01 crore as of 31 December 2022 . PBDT rose 29.53% to Rs 3420.75 crore. Provision for depreciation rose 10.32% to Rs 680.91 crore. Fixed assets increased to Rs 9,760.06 crore as of 31 December 2023 from Rs 7,514.62 crore as of 31 December 2022. Intangible assets increased from Rs 24.23 crore to Rs 571.33 crore. Profit before tax grew 35.39% to Rs 2,739.84 crore. Share of profit/loss was 4,700% lower at Rs -0.48 crore. Provision for tax was expense of Rs 637.55 crore, compared to Rs 473.52 crore. Effective tax rate was 23.27% compared to 23.40%. Minority interest decreased 12.89% to Rs 45.89 crore. Net profit attributable to owners of the company increased 37.30% to Rs 2,055.92 crore. Equity capital increased from Rs 649.55 crore as of 31 December 2022 to Rs 649.61 crore as of 31 December 2023. Per share face Value remained same at Rs 5.00. Promoters’ stake was 63.09% as of 31 December 2023 ,compared to 63.90% as of 31 December 2022 . Promoters pledged stake was 0.04% as of 31 December 2023 ,compared to 0.04% as of 31 December 2022 . Cash flow from operating activities increased to Rs 2,390.78 crore for year ended December 2023 from Rs 1,790.03 crore for year ended December 2022. Cash flow used in acquiring fixed assets during the year ended December 2023 stood at Rs 3,264.05 crore, compared to Rs 1,800.99 crore during the year ended December 2022. Business Highlights
Net realization
per case increased by 3.5% in Q1 CY24 to Rs 179.7 on account of improving
product mix in India and higher contribution of International markets which
have higher realization per case.
Consolidated
sales volume grew by 7.2% YoY to 240.2 million cases in Q1 CY24. India
territory grew by 4.4% YoY and International markets by 21.9% YoY, in-spite of
delay in the holi festival by 17 days resulting in delayed seasonality cycle.
CSD constituted
71%, JBD 7% and Packaged Drinking Water 22% in Q1 CY24.
For CY2024
season, the company commissioned three Greenfield production facilities in
India. First in Supa, Maharashtra on Jan 25, 2024 with total capex outlay of Rs
10,000 million, second in Gorakhpur; Uttar Pradesh on Apr 13, 2024 with total
capex outlay of Rs 11,000 million and third in Khordha; Odisha on Apr 30, 2024
with total capex outlay of Rs 7,000 million.
On 27th March,
2024, the company consolidated the franchised territories of South Africa,
Lesotho & Eswatini and the territories with distribution rights in Namibia,
Botswana, Mozambique and Madagascar.
The Company also acquired
9.80% (5.25% on fully diluted basis) of Equity Share Capital of Isharays Energy
Two, which is a special purpose vehicle engaged to supply solar power to
consumers in the state of Uttar Pradesh for a total consideration of Rs
1,92,00,000.
Management Comments :
Mr. Ravi Jaipuria, Chairman, Varun
Beverages said: “In-spite of delay in the holi festival by 17 days resulting in
delayed seasonality cycle, we are pleased to report a reasonably strong overall
operational and financial performance in the first quarter of the year. 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.
During last quarter, we also published our sustainability report in accordance
with the GRI reporting standards. We are committed to transparency and
accountability in our sustainability reporting practices, and we believe that
using the GRI Standards allows us to provide comprehensive and comparable
information to our stakeholders. 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. Our greenfield plant at DRC is
expected to start by the next quarter. A significant highlight of the quarter
was the successful completion of the strategic acquisition of The Beverage
Company (BevCo) in South Africa. This move has notably expanded our footprint
and fortified our presence across several dynamic markets in the African
region. 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 : Consolidated Results | | | Quarter ended | Year ended |
|---|
| Particulars | 202403 | 202303 | Var.(%) | 202312 | 202212 | Var.(%) |
|---|
| Net Sales (including other operating income) | 4,317.31 | 3,892.98 | 10.90 | 16,042.58 | 13,173.14 | 21.78 | | OPM (%) | 22.90 | 20.50 | 240 bps | 22.50 | 21.17 | 133 bps | | OP | 988.77 | 798.03 | 23.90 | 3,609.49 | 2,788.10 | 29.46 | | Other Inc. | 8.35 | 10.14 | -17.65 | 79.36 | 38.85 | 104.27 | | PBIDT | 997.12 | 808.17 | 23.38 | 3,688.85 | 2,826.95 | 30.49 | | Interest | 93.69 | 62.57 | 49.74 | 268.10 | 186.12 | 44.05 | | PBDT | 903.43 | 745.60 | 21.17 | 3,420.75 | 2,640.83 | 29.53 | | Depreciation | 187.52 | 172.2 | 8.90 | 680.91 | 617.19 | 10.32 | | PBT | 715.91 | 573.40 | 24.85 | 2739.84 | 2023.64 | 35.39 | | Share of Profit/(Loss) from Associates | -0.16 | -0.03 | -433.33 | -0.48 | -0.01 | -4,700.00 | | PBT before EO | 715.75 | 573.37 | 24.83 | 2739.36 | 2023.63 | 35.37 | | EO Income | 0 | 0 | - | 0 | 0 | - | | PBT after EO | 715.75 | 573.37 | 24.83 | 2739.36 | 2023.63 | 35.37 | | Taxation | 167.77 | 134.8 | 24.46 | 637.55 | 473.52 | 34.64 | | PAT | 547.98 | 438.57 | 24.95 | 2101.81 | 1550.11 | 35.59 | | Minority Interest (MI) | 10.71 | 9.5 | 12.74 | 45.89 | 52.68 | -12.89 | | Net profit | 537.27 | 429.07 | 25.22 | 2055.92 | 1497.43 | 37.30 | | P/(L) from discontinued operations net of tax | 0 | 0 | - | 0 | 0 | - | | Net profit after discontinued operations | 537.27 | 429.07 | 25.22 | 2055.92 | 1497.43 | 37.30 | | EPS (Rs)* | 4.13 | 3.30 | 25.22 | 15.82 | 11.52 | 37.30 | | | * EPS is on current equity of Rs 649.70 crore, Face value of Rs 5, 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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