Varun Beverages (VBL) Q3 2024 earnings summary

Executive summary

• Achieved consolidated revenue growth of 24.1% year-over-year in Q3 2024, driven by expanded distribution, product penetration, and favorable demand trends despite excessive rainfall in India.

• EBITDA grew 30.5% and PAT increased by 22.3% year-over-year, reflecting improved operational efficiencies and margin expansion.

• Successfully commissioned a greenfield facility in DRC, reaching full utilization, and announced plans for further expansion in Africa and India.

• Board approved a QIP to raise up to INR 7,500 crores (₹75,000 million) to fund growth, acquisitions, and debt reduction, pending shareholder approval.

• Focus remains on sustaining growth in both Indian and international markets, with Africa positioned for further expansion.

Financial highlights

• Q3 2024 revenue from operations (adjusted for excise GST) rose to INR 48,046 million (Rs 48,046.8 million), up 24.1% year-over-year; consolidated revenue from operations for Q3 2024 was ₹49,320.61 million.

• Consolidated sales volume increased 21.9% to 261.5–267.5 million cases, with 34 million cases from South Africa and DRC.

• Indian market volume grew 5.7%, impacted by heavy rains; international markets grew 7.9%.

• Non-carbonated beverages in India grew 23.9% over nine months.

• Gross margin improved by 22 bps to 55.5%; EBITDA margin expanded by 117 bps to 24%.

• PAT for Q3 2024 was INR 6,288.3 million, up from INR 5,140.6 million in Q3 2023; 9M PAT was INR 24,386.4 million.

• Net realization per case increased by 1.9% to Rs 179.6 in Q3 2024.

• Earnings per share (basic) for Q3 2024 was ₹1.91, compared to ₹1.54 in Q3 2023.

Outlook and guidance

• Expansion plans in DRC and new Indian facilities are on track, with additional capacity expected in the next year.

• QIP proceeds will be used for debt reduction, strategic acquisitions, and capacity expansion, including snack business in Africa.

• No upward revision to margin guidance; 21-22% margin remains the target due to potential raw material volatility.

• The business is seasonal, and continued growth is expected, supported by recent acquisitions and expansion.