Conference Call with Varun Beverages Management and Analysts on Q2CY25 Performance and Outlook. Listen to the full earnings transcript.
Food & Beverages company Varun Beverages announced Q2CY25 results Revenue from operations (net of excise / GST) decreased by 2.5% YoY to Rs 70,173.7 million in Q2CY25 as compared to Rs 71,968.6 million in Q2CY24. Consolidated sales volume declined by 3.0% to 389.7 million cases in Q2CY25 from 401.6 million cases in Q2CY24, primarily due to abnormally high unseasonal rainfall throughout the quarter in India. India volumes declined by 7.1%, while international volumes grew by 15.1% (South Africa growing at 16.1%), partially offsetting the overall decline. Net realisation per case at the consolidated level improved by 0.5%, driven by 6.6% improvement in the International markets. EBITDA increased by 0.4% in Q2CY25 to Rs 19,987.7 million from Rs 19,912.2 million in Q2CY24. Gross margins remained steady at 54.5% in Q2CY25. EBITDA margins increased by 82 bps in Q2CY25 to 28.5% from 27.7% in Q2CY24, in-spite of increase in fixed overheads due to new capacity being commissioned at four greenfield plants in India which all are yet to yield incremental volumes. PAT increased by 5.0% to Rs 13,254.9 million in Q2CY25 from Rs 12,618.3 million in Q2CY24 driven by operational efficiencies and lower finance cost. Commenting on the performance for Q2CY25 Ravi Jaipuria, Chairman, Varun Beverages, said, “We delivered a resilient performance during the quarter. In-spite of unusually early onset of monsoon rains in the peak summer months in India, we could keep our realizations per case and EBITDA margins intact. Due to growth in international markets supported by strong positive currency movement in Africa territories, Company ended the quarter with a positive PAT, in-spite of 3% decline in consolidated sales volumes. In International markets, Varun Beverages Morocco has commenced commercial production of PepsiCo’s snacks product ‘Cheetos’. This marks another milestone in strengthening our presence in the high-potential snack category, complementing our beverage portfolio and diversifying our revenue streams. We continue to focus on growth opportunities in South Africa market. We have enhanced capacity by setting up a can line in Durban, one of our existing production facilities. We are awaiting approval from Competition Commission of South Africa for land parcel purchase adjoining to our production facility in Boksburg to further enhance capacity & backward integration. These are few starting steps in our series of initiatives. Strong currency and our efforts in implementing backward integration last year have resulted in enhanced profitability in all our African territories. We have further strengthened Zambia, DRC and South Africa subsidiary balance sheets and through in-process equity infusion raising our stake in Zambia from 90% to 95%. In line with our dividend policy, the Board of Directors has approved a second interim dividend of 25% of face value, i.e., Rs 0.50 per share, resulting in a total cash outflow of approximately Rs 1,691 million. Although unseasonal rains have impacted performance during the quarter, we have successfully navigated such challenges in the past and emerged stronger. We continue to strengthen our on-ground execution by adding more visi-coolers and ensuring wider product availability across retail touchpoints. With robust capacities now operational, an expanding product portfolio, and a sharply focused distribution network, we are well-positioned to capture emerging opportunities and drive sustainable, long-term value creation for all stakeholders.” Result PDF