Share price of this large-cap FMCG stock and a key player in the beverage industry jumped 2.3 percent on BSE to hit an intraday high at Rs. 1,496 on Monday, after reporting a rise in net profit by 281 percent QoQ and 25 percent YoY.
With a market capitalisation of Rs. 1.85 lakh crore, Varun Beverages Limited has delivered positive returns of about 86.3 percent in the last one year and nearly 44 percent in the last six months. So far in 2024, it has given around 17 percent of positive returns.
The fluctuations in the share prices were observed after the company announced the financial results for Q4 FY23-24 and FY24, through the recent filings with the stock exchanges on Monday.
Varun Beverages witnessed a rise in revenue from operations by 11.3 percent YoY from Rs. 3,952.6 crore in Q4 FY22-23 to Rs. 4,398 crore in Q4 FY23-24 and grew by 61 percent QoQ from Rs. 2,731 crore in Q3 FY23-24 to Rs. 4,398 crore in Q4 FY23-24.
The consolidated net profit of the company stood at Rs. 548 crore in Q4 FY23-24, increasing by 281 percent QoQ from Rs. 143.8 crore in Q3 FY23-24 and by 25 percent YoY from Rs 438.6 crore in Q4 FY22-23.
Additionally, total sales volume grew by 7.2 percent to 24.02 crore cases in Q1 CY2024 from 22.41 crore cases in Q1 CY2023.
During the quarter, India’s territory grew by 4.4 percent and International markets by 21.9 percent, in-spite of a delay in the Holi festival by 17 days resulting in a delayed seasonality cycle.
EBITDA increased by 23.9 percent to Rs. 988.8 crore YoY in Q1 CY2024 and EBITDA margin improved by 240 bps to 22.9 percent in Q1 CY2024, led by higher gross margins and increased realisation.
This improvement in EBITDA and EBITDA margin is in-spite of the rise in fixed costs associated with the acquisition of new territories and the commissioning of new greenfield plants for the season.
Varun Beverages Morocco SA, a wholly-owned subsidiary, has entered into an Exclusive Snacks Appointment Agreement to manufacture and package Cheetos in Morocco, by May 2025. This is in addition to the existing distribution agreement for PepsiCo’s snacks portfolio consisting of Lays, Cheetos, and Doritos in Morocco.
For FY23, three territories in the Indian Subcontinent: India, Sri Lanka, and Nepal, contributed nearly 83 percent to revenues; three territories in Africa: Morocco, Zambia, and Zimbabwe, contributed to about 17 percent of total revenues.
Further, the company’s Board approved the incorporation of Varun Foods Pvt. Ltd., a wholly-owned subsidiary company in Zimbabwe, to carry on the business of Food Products.
Varun Beverages Limited is a key player in the beverage industry and one of the largest franchisees of PepsiCo in the world (outside the USA).
The company produces and distributes a variety of carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs), including packaged drinking water marketed under PepsiCo-owned brands.
Written by Shivani Singh
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