Varun Beverages, a leading bottler of PepsiCo products globally, has announced impressive financial results for the first quarter of the calendar year 2024, with a substantial 24.9% year-on-year surge in profit. The company’s profit stood at Rs 547.98 crore for the quarter, marking a significant increase from Rs 438.57 crore recorded during the corresponding period last year.
According to the regulatory filing released by Varun Beverages, revenue from operations witnessed a commendable growth of 11.3% year-on-year, reaching Rs 4397.98 crore compared to Rs 3952.59 crore in the same quarter of the previous year. The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) also witnessed a robust growth of 24% year-on-year, standing at Rs 990 crore.
The impressive EBITDA growth was attributed to higher gross margins and increased realization, despite the rise in fixed costs associated with the acquisition of new territories and commissioning of new greenfield plants for the season.
Varun Beverages reported a total sales volume growth of 7.2% to 240.2 million cases in Q1 CY2024 from 224.1 million cases in Q1 CY2023. The company highlighted that its India territory witnessed a growth of 4.4%, while international markets recorded a remarkable growth of 21.9%, despite the delay in the holi festival by 17 days, resulting in a delayed seasonality cycle.
Furthermore, the company noted a 3.5% increase in net realization per case in Q1 CY2024, reaching Rs 179.7, driven by an improved product mix in India and higher contributions from international markets.
Gross margins also witnessed a significant improvement, rising by 385 basis points to 56.3% from 52.4% during Q1 CY2024, primarily due to reduced PET prices and initiatives focused on reducing sugar content and light-weighting of packaging.
Commenting on the strong performance, Ravi Jaipuria, Chairman of Varun Beverages Limited, expressed satisfaction despite the challenges posed by delayed seasonality. He highlighted the company’s consolidated sales revenue growth of 10.9% and emphasized the strategic growth initiatives, including the expansion into snack food production in Morocco and the commissioning of three greenfield production facilities in India.
Varun Beverages also announced the appointment of Rajesh Chawla as the Chief Financial Officer, effective May 14, 2024, following the resignation of Lalit Malik from the position. The company expressed confidence in Chawla’s capabilities to drive financial excellence and support its growth journey in the years ahead.
