Varun Beverages Q2 profit up 25.4% to Rs 1,005.4 crore, revenue up 13.6% to Rs 5,700 crore

Varun Beverages Ltd, PepsiCo's largest franchise bottler, on Thursday, reported an increase of 25.36 per cent in consolidated net profit at Rs 1,005.42 crore for the quarter that ended June 2023, supported by revenue growth and improvement in margins. The company, which follows the calendar year as its financial year, posted a net profit of Rs 802.01 crore during the April-June quarter a year ago. Its revenue from operations during the quarter under review stood at Rs 5,699.73 crore, up 13.6 per cent, as against Rs 5,017.57 crore of the corresponding period last fiscal, Varun Beverages Ltd (VBL) said in a regulatory filing.

The increase in revenue was "driven by an increase in net realization," VBL said in its earnings statement. While "PAT increased by 25.4 per cent to Rs 1,005.42 crore from Rs 802 crore in Q2 2022, driven by growth in revenue from operations and improvement in margins," it said. VBL's EBITDA margins improved by 169 bps to 26.9 per cent in Q2 CY2023 driven by higher gross margins and operational efficiencies, it said. "Consolidated sales volumes grew by 4.6 per cent in Q2 CY2023 to 314 million cases compared to 300 million cases in Q2 CY2022, led by robust growth in international markets. Sales volume growth in India got affected due to abnormally high unseasonal rains throughout the quarter," it said.

Varun Beverages' total expenses were at Rs 4,430 crore, up 11.68 per cent in the first quarter of FY 2023-24. Its total income in the June quarter was Rs 5,741.33 crore, up 14.18 per cent.

VBL Chairman Ravi Jaipuria said: "We have delivered a resilient performance in the quarter, despite facing a soft demand environment in India due to abnormally high unseasonal rains throughout the quarter." "Our consolidated revenue grew by 13.3 per cent during the quarter, with our international territories showing strong momentum. Furthermore, sales volume growth and improvement in realization per case, contributed to a 20.8 per cent and 25.4 per cent improvement in our EBITDA and PAT performance during Q2, respectively," he said.

VBL accounts for 90 per cent of PepsiCo's beverage sales volume in India. Shares of Varun Beverages Ltd were trading at Rs 823.85 apiece on BSE, up 1.96 per cent from the previous close.