Varun Beverages Q4 results: Profit up 76% at Rs 144 crore, dividend announced; stock reacts

Varun Beverages Ltd, a PepsiCo franchisee, on Monday reported a 76 per cent year-on-year (YoY) rise in profit after tax at Rs 143.76 crore for the December quarter, driven by growth in revenue from operations and improved profit margins. Revenue from operations jumped 20.5 per cent YoY to Rs 2,667.70 crore for the quarter from Rs 2,214.24 crore in the same quarter last year, driven by volume growth in both India & International markets.

Ebitda for the quarter climbed 36 per cent YoY to Rs 418.29 crore, led by increased realisation, higher gross margins and improved operational efficiencies. Following the development, the Varun Beverages stock recovered from a low of Rs 1,260.65 and was trading at Rs 1,287.20, up 0.12 per cent. The scrip hit a high of Rs 1,294 just after the results announcement. 

varun Beverages announced a final dividend of Rs 1.25 per shares and said the record date will be fixed by the board of directors of the company soon.

Chairman Ravi Jaipuria said that despite the abnormally high unseasonal rains in the peak season, his company concluded 2023 on a strong note. Jaipuria said his company witnessed a healthy double-digit volume growth in both Indian and International markets.

"Our consolidated sales volume increased by 13.9 per cent, and the net realisation per case increased by 7 per cent in 2023. Both these together contributed to our remarkable revenue growth of 21.8 per cent and an impressive PAT growth of 35.6 per cent. In line with our strategic objectives, we have successfully commissioned multiple greenfield and brownfield facilities across key geographies during the year. This expansion not only strengthened our manufacturing capabilities but also extended our market reach," Jaipuria said.

Jaipuria said distribution network and chilling infrastructure have also seen a substantial growth, further solidifying our presence in the market.

Acquisition

Jaipuria said his company will acquire The Beverage Company (BevCo), subject to regulatory and other approvals.

"BevCo holds franchise rights for PepsiCo beverage products in South Africa, Lesotho, and Eswatini, along with distribution rights in Namibia and Botswana. This acquisition, which aligns perfectly with our strategic goals, offers an excellent opportunity to significantly enhance our presence in the African market—a region known for high demand for soft drinks and favorable demographics. The integration of BevCo into VBL's operations is expected to yield substantial synergistic benefits in the future," he said.

Jaipuria said his company's strategy is geared towards sustaining healthy growth momentum.

"We will continue to focus on strengthening our market position, both in India and internationally, and place emphasis on product categories that are aligned with evolving consumer preferences. Our journey through CY2023 has set a solid foundation for continued success, and we remain confident in our ability to deliver sustainable growth and value for all our stakeholders in the years to come," he said.

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