Cost of materials consumed rose 33.1% to Rs 1454.39 crore in Q1 March 2022 over Q1 March 2021. Gross margins for Q1 CY2022 reduced by 427 bps to 51.5% from 55.8% in Q1 CY2021 primarily because of increase in preform prices by about 30% over Q1 CY2021.

Despite increase in input costs, EBITDA increased by 39.1% to Rs 531 crore in Q1 CY2022 and EBITDA margin improved by 175 bps to 18.8% in Q1 CY2022 led by higher realization and operating leverage from increased sales volume.

Robust volume growth and increase in net realization boosted the revenue. Total sales volume grew by 18.7% to 17.97 crore cases in Q1 CY2022 from 15.14 crore cases in Q1 CY2021 driven by strong demand across geographies. The third wave of Covid in January 2022 had no impact on company's performance.

Realization per case improved by 6.3% to Rs. 157.3 in Q1 CY2022 driven by price hike in select SKUs, change in SKU mix and higher realization in international markets. CSD (carbonated soft drink) constituted 70%, juice based drinks 7% and packaged drinking water 23% of total sales volumes in Q1 CY2022.

Ravi Jaipuria, chairman – Varun Beverages said: "We have started the year on a strong note, delivering notable growth across all parameters. Robust demand in both domestic and international markets, also supported by the early onset of summer in India, translated to healthy volumes during the quarter. On the demand front, we are seeing a solid uptick in consumption.

During the quarter, the board approved the proposal to manufacture “Kurkure Puffcorn” for PepsiCo India as part of their network of co-packers. The commercial production is expected to begin from Q3 CY2022.

As we look ahead, on the back of an improving demand environment, we remain confident of delivering healthy volume growth in the medium to longer term."

Meanwhile, the company's board recommended issuing 1 bonus share for every 2 equity shares held (1:2) as on the record date.

Varun Beverages is a key player in beverage industry and one of the largest franchisee 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. India is the largest market and contributed ~75% of revenues from operations (net) in Fiscal 2021. VBL has also been granted the franchise for various PepsiCo products for the territories of Nepal, Sri Lanka, Morocco, Zambia and Zimbabwe.