Varun Beverages Q1CY22 Results: Consolidated profit rose 98.17% YoY to Rs 271 crore

Varun Beverages Limited (VBL), a key player in the beverage industry, on Thursday reported a 98.17% YoY rise in the consolidated profit for the first quarter ended March 31, 2022 (Q1CY2022). It had posted a profit of Rs 136.75 crore in the corresponding quarter of the previous calendar year (CY). The company follows the January to December financial year.

PAT growth was on the back of improved margins, reduction in finance cost, and higher profitability from our international operations. Finance cost in Q1CY2022 declined by 19.0% to Rs. 469.6 million primarily because of lower average cost of borrowing.

Varun Beverages revenue from operations increased by 26.32% YoY to Rs 2867.47 crore in the period under consideration against Rs 2,269.87 crore posted last year. Its EBITDA grew 39.18% YoY to Rs 530.98 crore against Rs 381.5 crore posted last year. The company's margin grew to 18.51% in Q1CY2022 from 16.80% posted in Q1CY21. EBITDA margin improved due to higher realisation and operating leverage from increased sales volume.

Gross margins for Q1 reduced by 427 bps to 51.5 per cent from 55.8 per cent in Q1 CY2021 primarily because of an increase in preform prices by 30 per cent over Q1CY2021.

"We have started the year on a strong note, delivering notable growth across all parameters. Robust demand in both domestic and international markets, also supported by the early onset of summer in India, translated to healthy volumes during the quarter. This along with improved net realizations resulted in solid net revenue growth of 26.2% in Q1CY22," commented Mr. Ravi Jaipuria, Chairman, Varun Beverages Limited.

The board of Varun Beverages today also approved the bonus issue of equity shares in the proportion of one for every two held by investors. The company did not announce the record date but said bonus shares will be issued within two months from the date of board approval i.e. by June 27, 2022. The company will now seek shareholder approval for the same.