Varun Beverages Limited has reported a strong performance for Q3 CY24, with consolidated revenue growing 24.1% YoY. The growth was driven by the company’s expanded distribution network, increased product penetration, and favorable demand trends across key markets, despite the challenges posed by excessive rainfall in India.
EBITDA for the quarter grew by 30.5%, supported by enhanced operating efficiencies, which resulted in a 117 bps improvement in EBITDA margins. Additionally, the company’s PAT (Profit After Tax) witnessed a healthy growth of 22.3% YoY for the quarter.
Commenting on the performance, Mr. Ravi Jaipuria, Chairman of Varun Beverages Limited, said, “We are pleased to report another strong quarter. Our consolidated revenue growth of 24.1%, driven by contributions from BevCo, reflects the success of our expanded distribution and favorable demand in key markets. We also saw a robust improvement in EBITDA margins, leading to significant growth in profitability.”
Key Developments
- Commercial Production in DRC: Varun Beverages commenced commercial production at its new greenfield facility in Kinshasa, Democratic Republic of Congo (DRC), producing carbonated soft drinks and packaged drinking water. The facility, with two PET lines, has an installed capacity of 550 BPM each. The company has rapidly scaled production to 100% utilization, with plans for further expansion and backward integration in the region.
- QIP Issue: The Board of Directors approved a proposal to raise funds through the issuance of equity shares via a Qualified Institutions Placement (QIP), amounting to a total of ₹7,500 crore, subject to shareholder approval. This capital will support the company’s growth plans, including expansion into new territories, potential acquisitions, and further strengthening of its balance sheet.
- Equity Share Subdivision: In September 2024, the company successfully completed the subdivision of its equity shares, reducing the face value from ₹5 per share to ₹2 per share.
Looking ahead, Varun Beverages is making significant progress on the development of new production facilities across India, which are expected to be operational before the next key season. The company continues to capitalize on high-growth opportunities in both Indian and international markets, particularly in Africa, where it is well-positioned to drive further expansion.
Mr. Jaipuria emphasized the company’s focus on sustaining healthy growth in domestic and international markets, with ongoing efforts to capture emerging demand trends and enhance operational capabilities. The proposed capital raise and production expansion plans reflect Varun Beverages’ commitment to long-term growth and value creation for its stakeholders.
