Varun Beverages beats estimates as Q3 net profit rises by 59%
1 min read . Updated: 01 Nov 2022, 01:35 PM IST
Premium- Varun Beverages shares rose more than 3% to ₹1,084 apiece on the BSE after its Q2 results announcement
Varun Beverages Ltd (VBL) reported a better-than-expected third-quarter profit on Tuesday as the Pepsi bottler benefited from price increases that it had implemented to protect its margins. The company's net profit rose by 59% to ₹to 381 crore as compared to ₹240 crore in the year ago quarter.
Meanwhile, its revenue from operations increased 33% to ₹3,248 crore from ₹2,440.4 crore in the corresponding quarter of the previous fiscal. Varun Beverages makes and bottles several PepsiCo Inc-branded drinks such as Mirinda, Mountain Dew, and Tropicana.
The company's Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose over 41% at ₹699 crore from ₹494 crore year-on-year (YoY) whereas margin during the quarter under review stood at 21.5% from 20.2% a year ago. The company said that EBITDA margin stood healthy in Q3 CY2022, led by the higher realization and operating leverage from increased sales volume.
Commenting on the performance for Q3, Ravi Jaipuria, Chairman, Varun Beverages Limited said, “We are pleased to report yet another strong quarter. Our India business has delivered a solid organic volume growth of 22% led by a favorable demand environment and strong performance of our energy drink - Sting. In addition, healthy double-digit sales volume growth of 31% in our key international markets further assisted performance during the quarter.. Overall, the demand environment for the beverage industry has been robust and we are witnessing a healthy offtake in India as well as in our international markets. The festive season in Q4 is expected to further aid consumption trends in this calendar year."
Varun Beverages, like most consumer majors, raised prices of its products, while a broader customer return to pre-pandemic routines has pushed demand from restaurants and bars higher. The company’s move to increase its prices helped make up for higher expenses, but a few analysts had raised concerns that more expensive sodas and juices could deter cash-strapped consumers, particularly in rural India.
Varun Beverages added its Morocco business would begin distribution and sale of several PepsiCo chips brands such as Lays, Doritos, and Cheetos from January in the country.
