Conference Call with Varun Beverages Management and Analysts on Q3CY24 Performance and Outlook. Listen to the full earnings transcript.
Non-alcoholic Beverages company Varun Beverages announced Q3CY24 results Financial Highlights: Sales Volumes / Net Revenues Consolidated sales volume grew by 21.9% to 267.5 million cases in Q3CY24 from 219.5 million cases in Q3CY23. This includes ~34 million cases from BevCo and DRC during the current quarter. Heavy rains through out the quarter led to India volumes growing in mid single digits i.e. 5.7% and International volumes grew by 7.9% organically. Net Revenue from operations grew by 24.1% YoY in Q3CY24 to Rs 48,046.8 million from Rs 38,705.2 million in Q3CY23 inline with the volume growth. Net realization per case increased by 1.9% to Rs 179.6 in Q3CY24. CSD constituted 75%, JBD 4% and Packaged Drinking Water 21% in Q3CY24 at a consolidated level. Non-carbonated beverage portfolio (juice based drinks, value added dairy beverages, sports drinks) in India has grown by 23.9% in 9M CY24 YoY. Mix on consolidated level has come down post consolidation of SA & DRC markets which have primarily CSD in sales mix. Gross Margins / EBITDA Gross margins increased by 22 bps to 55.5% in Q3CY24, compared to 55.3% in Q3CY23. ~ 49% of our consolidated sales volumes come from Low sugar / No sugar products in 9M CY24. EBITDA increased by 30.5% to Rs 11,511.2 mn and EBITDA margin improved by 117 bps to 24.0% in Q3CY24, driven by operational efficiencies. PAT PAT increased by 22.3% to Rs 6,288.3 mn in Q3CY24 from Rs 5,140.6 mn in Q3CY23 driven by volume growth & improved margins. Depreciation increased by 50.2% in Q3CY24 on account of acquisition of BevCo and setting-up of new production facilities in India & DRC. Finance cost increased by 89.7% in Q3CY24 primarily due to new production facilities, acquisition of BevCo as well as increased cost of borrowing. Ravi Jaipuria, Chairman – Varun Beverages said: “We are pleased to report another strong quarter, despite the challenges posed by excessive rainfall in India. We achieved consolidated revenue growth of 24.1%, including contributions from BevCo, driven by our expanded distribution network, increased product penetration, and favorable demand trends in key markets. Enhanced operating efficiencies led to an improvement of 117 bps in our EBITDA margins, resulting in a robust 30.5% growth in EBITDA, and a healthy 22.3% growth in PAT for the quarter. On the operational front, we are excited to share the successful commissioning of our greenfield facility in the Democratic Republic of Congo (DRC). In response to strong demand and our limited presence in the region, we have swiftly ramped up the facility to 100% utilization on three shift basis. This performance has encouraged us to move forward with expansion plans including backward integration and a second facility, expected to commence operations in the next calendar year. Furthermore, we are making significant progress on new facilities across India, which are on track to be commissioned before the key season next year. These developments reflect our commitment to capturing high-growth opportunities and enhancing both our domestic and global footprint. As part of our commitment to long-term growth, the Board of Directors has approved a proposal to raise funds through the issuance of equity shares, with an aggregate amount not exceeding Rs 7,500 crore via QIP, subject to shareholders' approval. This capital will be instrumental in supporting our growth plans, including expansion into new territories, potential strategic acquisitions, and further strengthening of our balance sheet. Overall, our focus remains on sustaining healthy growth in both Indian and international markets. The Indian market, with its growing consumption class and evolving consumer preferences, continues to offer immense opportunities. Meanwhile, our global operations, particularly in Africa, are positioned to drive further growth as we capitalize on emerging demand trends and enhance our operational capabilities. Our proven execution capabilities have been instrumental in delivering exceptional value to all stakeholders, and we remain committed to sustaining this momentum well into the future.” Result PDF