Varun Beverages Q2 Results Review - Domestic Business Drives Volume Growth: Motilal Oswal

Motilal Oswal Report

Varun Beverages Ltd. reported a revenue growth of 29% YoY in Q2 CY24, led by volume growth (up 28% YoY). This was primarily driven by a domestic volume growth of 23% YoY due to increased capacity and a strong summer season. However, international volume was flat due to the portfolio transition to zero sugar in Zimbabwe.

Realization was flat YoY at Rs 179/case.

Management guided a double-digit volume growth in the domestic market going forward, while international market (mainly Zimbabwe) would rebound to a healthy volume growth from Q3 CY24.

We largely maintain our CY24/CY25/CY26 earnings estimates. We reiterate our Buy rating on the stock with a target price of Rs 1,850.

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