Varun Beverages Ltd (VBL) – Q1 FY2025 Earnings Report part 1

VBL

1. Revenue Growth:

• Consolidated revenue stood at ₹5,566.9 crore, up approximately 28.9% year-on-year. • Standalone revenue rose to ₹4,052.5 crore, showing a growth of 17.6% year-on-year. • Strong sales volume growth was a key driver, supported by both domestic demand and global expansion. 2. Volume Performance: • Total sales volume reached 312.4 million cases, an increase of 30.1% compared to the same quarter last year. • Organic volume growth in India was approximately 15.5%. • The remaining growth came from acquisitions and international operations in South Africa and the Democratic Republic of Congo (DRC). 3. Profitability and Margins: • EBITDA came in at ₹1,263.96 crore, growing 27.8% year-on-year. • EBITDA margin declined slightly by about 20 basis points due to integration of lower-margin international businesses. • Net profit (PAT) increased by 33.5% to ₹731.36 crore. • Net profit margin was approximately 13.05%, nearly stable compared to the previous year. 4. EPS and Analyst Estimates: • Earnings Per Share (EPS) was reported at ₹2.15. • EPS missed average analyst expectations by a narrow margin (estimated around ₹2.16). • Despite the slight miss, the earnings trend remains healthy and consistent. 5. Gross Margin and Cost Trends: • Gross margin for the quarter stood at 54.6%, down by around 171 basis points. • Decline was mainly due to a shift in product and geographical mix after the consolidation of South African and DRC operations. 6. Depreciation and Finance Cost: • Depreciation expenses rose by 45%, attributed to the commissioning of three new plants at Supa, Gorakhpur, and Khordha. • Finance costs remain low in India post-debt repayment, with minor interest costs from international leases. • Interest income during the quarter was ₹10.8 crore, offsetting some of the borrowing costs.