Varun Beverages posts two-fold jump in June quarter, PAT at Rs 802 cr

Varun Beverages, PepsiCo's largest franchise bottler, on Monday reported a two-fold rise in consolidated profit after tax at Rs 802.01 crore for June quarter on growth in revenue from operations and improvement in margins.

The company, which follows January-December financial year, had posted a PAT of Rs 318.80 crore in April-June 2021.

Varun Beverages Ltd's (VBL) revenue from operations in the quarter stood at Rs 5,017.57 crore, up two-fold as compared to Rs 2,483.04 crore in the year-ago period, when sales channels were disrupted.

Revenue from operations grew "on account of robust volume growth over last year and higher realization on a consolidated basis," said VBL in its earning statement.

"Total sales volumes were up 96.9 per cent year-on-year at 300 million cases in Q2/2022 as compared to 152 million cases in Q2/2021, on account of the strong demand during the peak season and return to normalcy," it said.

However, its gross margins declined by 302 basis points YoY to 50.5 per cent during Q2/2022 due to an increase in preform prices by 30 per cent over Q2/2021.

EBITDA margins improved to 25.2 per cent in Q2/2022, led by the higher realization and operating leverage from increased sales volume, it said.

"Profit after tax increased by 151.6 per cent to Rs 802 crore from Rs 318.8 crore in Q2/2021, driven by high growth in revenue from operations and improvement in margins," the earning statement said.

Total expenses were at Rs 3,966.42 crore as against Rs 2,087.79 crore.

Commenting on the results, its Chairman Ravi Jaipuria said VBL delivered an all-time high performance during the quarter.

"In addition, we were able to improve our realization per case by taking price hikes in select stock keeping units (SKUs), reduction in discounts/incentives, and improving the mix leading to doubling of our topline during the quarter as compared to last year," he said.

On the profitability front, despite the inflationary raw material environment, VBL witnessed a limited impact on gross margins during the quarter because of early stocking of key raw materials and improvement in realizations, he said.

"On the demand front, we are seeing enhanced consumption trends across markets. Directionally, we continue to implement strategic initiatives to solidify our market position as a key player in the global beverage industry, he said.

Meanwhile, in a separate filing, VBL said its board on Monday approved an interim dividend of Rs 2.50 per equity share for financial year 2022 on equity shares of nominal value of Rs 10 each.

Shares of Varun Beverages Ltd were trading at Rs 928 apiece, up 5.08 per cent on BSE.