In This Article:
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Revenue Growth: 24.1% year-on-year increase to INR48,046 million in Q3 2024.
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Sales Volume: 21.9% increase to 261.5 million cases in Q3 2024.
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EBITDA Growth: 30.5% increase to INR11,511 million in Q3 2024.
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EBITDA Margin: Improved by 117 basis points to 24%.
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Gross Margin: Improved by 22 basis points to 55.5%.
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PAT Growth: 22.3% increase to INR6,288.3 million in Q3 2024.
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Depreciation: Increased by 50.2% due to acquisitions and new facilities.
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Finance Costs: Increased by 89.7% due to new CapEx and higher borrowing costs.
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Net Debt: Approximately INR6,000 crores.
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Product Mix: CSD 75%, Juice 4%, Packaged Drinking Water 21% of total sales volume.
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Noncarbonated Beverages Growth: 23.9% increase in nine months.
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International Market Growth: 9% increase, with significant contributions from South Africa and DRC.
Release Date: October 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Varun Beverages Ltd (NSE:VBL) reported a strong consolidated revenue growth of 24.1% for the quarter, driven by an expanded distribution network and favorable demand trends.
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The company achieved a 30.5% growth in EBITDA, with an improvement of 117 basis points in EBITDA margins, reflecting enhanced operational efficiencies.
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Successful commissioning of a greenfield facility in the Democratic Republic of Congo, which reached 100% utilization, indicates strong demand and operational capability.
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The Board approved a proposal to raise funds up to INR7,500 crores, which will support growth plans, including expansion into new territories and potential strategic acquisitions.
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International markets, particularly in Africa, are positioned to drive further growth, with significant progress on new facilities across India and Africa.
Negative Points
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The Indian market's volume growth was impacted by heavy rains, resulting in a modest 5.7% growth compared to international markets.
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Finance costs increased by 89.7% due to new CapEx and higher borrowing costs, impacting overall profitability.
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Depreciation rose by 50.2% primarily due to the acquisition of BevCo and new production facilities, affecting net income.
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Gross margins in India dipped by 120 basis points, attributed to raw material costs and changes in revenue mix.
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The company faces competition from Campa Cola, which could impact market share and necessitate strategic pricing adjustments.
Q & A Highlights
Q: Can you explain the reasons behind the sharp slowdown in India volume growth and any regional differences? Also, has there been a recovery in October? A: The slowdown is primarily due to heavy rains affecting rural areas. The third quarter should be viewed in conjunction with the second quarter as rains can shift between them. As for competition, Campa Cola is a formidable player, but it hasn't affected us significantly. We are improving our market reach, and there's enough room for everyone to grow in the Indian market.