Varun Beverages Q1 Results: Profit Up 25%, Meets Estimates

Varun Beverages Ltd.'s profit rose in the first quarter of calendar year 2024, meeting analysts' estimates.

The company's net profit rose 25% year-on-year to Rs 548 crore in the January-March period, according to its exchange filing on Monday. This compares with a Rs 518.41-crore consensus estimate of analysts tracked by Bloomberg.

• Revenue up 11% at Rs 4,398 crore versus Rs 3,953 crore (Bloomberg estimate: Rs 4,372.01 crore).

• Ebitda up 24% at Rs 989 crore versus Rs 798 crore (Bloomberg estimate: Rs 916.16 crore).

• Ebitda margin at 22.5% versus 20.2% (Bloomberg estimate: 21%).

• Net profit up 25% at Rs 548 crore versus Rs 439 crore (Bloomberg estimate: Rs 518.41crore).

India territory grew by 4.4% and international markets grew by 21.9% during the quarter. This came despite delay in Holi festival by 17 days, resulting in delayed seasonality cycle.

Net realisation 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 realisation per case.

The company's total volumes rose 7.2% year-on-year to 240 million unit cases.

71% of the volumes came from the CSD category, 22% from the water segment, and the remainder 7% from the juice segment

The company completed the acquisition of The Beverage Company (Proprietary) Ltd., South Africa during the quarter. The acquisition allowed Varun Beverages to consolidate its presence in franchised territories in South Africa, Lesotho, and Eswatini, as well as territories with distribution rights in Namibia, Botswana, Mozambique, and Madagascar.

The company's subsidiary also entered into an Exclusive Snacks Appointment Agreement to manufacture and package Cheetos in the territory of Morocco effective May 1, 2025, that is, the expected date of start of commercial production from the company's manufacturing facility.

The company also commenced commercial production at three greenfield facilities.