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Top Highlights

• May 2, 2023

• Varun Beverages Limited

• PAT higher by 62% YoY to Rs. 4,386 mn

• (net of excise / GST)

• Net realization increased by 10.4% to Rs. 173.7 per case

• Total sales volumes grew by 24.7%

• EBITDA increased by 50.3%

• Gross margins improved by 89 bps to 52.4% from 51.5%

• EBITDA margins improved by 172 bps to 20.5%

• driven by high growth in revenue from operations, improvement in margins, and transition to a lower tax rate in India

• Depreciation increased by 31% and Finance cost increased by 33% in Q1 CY2023

• despite weather disruptions in some parts of India in the month of March

• commissioning of our greenfield production facility at Kota, Rajasthan and brownfield expansion at 6 facilities

• additional Greenfield plant in Jabalpur, MP

• construction of a new production facility in DRC has already starte

• Our focus now turns towards new performers like Value Added Dairy, Sports Drinks, and Juice segments to sustain the growth momentum

• the final dividend of Re. 1 per share taking the total dividend payout for the full year to level of Rs. 3.5 per share

• by investing in PET recycling

• e Company produces and distributes a wide range of carbonated soft drinks (CSDs), as well as a large selection of non-carbonated beverages (NCBs

• PepsiCo CSD brand

Toughts & Comments

HK

AI summary: Varun Beverages Limited (VBL) reported a 62% YoY increase in PAT to Rs. 4,386 million in Q1 CY2023, driven by high growth in revenue from operations, improvement in margins, and transition to a lower tax rate in India. Total sales volumes grew by 24.7%, while net realization increased by 10.4% to Rs. 173.7 per case. VBL's focus now turns towards new performers like Value Added Dairy, Sports Drinks, and Juice segments to sustain the growth momentum. The company produces and distributes a wide range of carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs) under the PepsiCo brand. India is the largest market and contributed ~80% of revenues from operations in Fiscal 2022.