Varun Beverages Q3 Results: Company's net profit jumps 20% to Rs 742 crore

News Topical, Digital Desk : Varun Beverages Q3 Results: Varun Beverages Ltd., one of the largest bottling partners of PepsiCo Limited, announced its September quarter (Q3) results on Wednesday, October 29.

This was the company's third consecutive calendar quarter. Consolidated sales volume increased 2.4% year-on-year (YoY) to 273.8 million cases, compared to 267.5 million cases in the same period last year.

This increase came despite heavy rains continuing across various parts of the country throughout the quarter. Volumes in India remained nearly flat, while international markets grew 9%, led by a strong performance in South Africa. 

Other key results include gross margin expansion of 119 basis points to 56.7%. This improvement was driven by higher contribution from the water category in international markets and in-house backward integration, which reduced raw material procurement expenses and shifted employee costs, power and fuel, and other manufacturing expenses. Revenue also increased 2%. Compared to the previous year, it increased to ₹4,896.7 crore. The company's net profit increased by 20% to ₹742 crore, compared to ₹619 crore in the same period last year. This increase was due to lower finance costs and higher other income, which includes interest on deposits in India and favorable currency movements in international markets. EBITDA remained almost stable at ₹1,150 crore. However, EBITDA margin declined slightly to 23.4%, from 24% last year, a decline of 60 basis points. Varun Beverages has amended the object clause in its Memorandum of Association (MoA). Now the company will also enter the Alcobev business. The company announced a detailed partnership with Carlsberg in South Africa. Additionally, Varun Beverages is establishing a new wholly-owned subsidiary in Kenya, which will be engaged in the manufacturing, distribution, and sales of beverages. Company Chairman Ravi Jaipuria said, “We are establishing a new 100% owned entity in Kenya under Varun Beverages. Additionally, we are diversifying our product portfolio and will test market Carlsberg Breweries A/S's brand of beer in certain African markets under exclusive distribution agreements with them.”

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