Varun Beverages Profit Jumps 128% in Q1; Board Announces Bonus Issue

Varun Beverages Ltd, PepsiCo’s largest franchise bottler, on Monday reported a 128% jump in net profit to Rs 136.75 crore in the first quarter ended March 2021. The company had posted a net profit of Rs 60.06 crore in the year-ago period. “PAT (Profit After Tax) growth was driven by higher revenues, improvement in margins and higher profitability from international operations,” the company said in the filing.

“Repayment of debt as well as lower average cost of borrowing resulted in reduced finance cost, which further aided PAT growth,” it added.

Varun Beverages’ revenue from the operations increased to Rs 2240.89 crore, up by 33.7% YoY during the the March quarter. Its total income during the quarter under review stood at Rs 2,275.60 crore, up 31.96% from the same period a year ago. The total expenses reported at Rs 2,080.91 crore in the quarter under review, against Rs 1,650.18crore in the year-ago period.

Commenting on the performance for Q1 2021 Ravi Jaipuria, chairman, Varun Beverages Limited said, “We have started the year 2021 on a healthy note delivering progressive performance across parameters in Q1. The company registered a strong volume growth of 33 per cent YoY (Year-on-Year).”

“From a demand standpoint, while we saw a notable recovery in the domestic markets in Q1, the environment has evolved now with the onset of the second wave of COVID infections in the country. We are now witnessing more localized, micro lockdowns and restrictions being imposed rather than a nation-wide

lockdown witnessed last year. The situation is being addressed by wider vaccination drives being carried out across the nation, which we expect will restore normalcy sooner than later,” he further added.

About the outlook, he said, “Notwithstanding short-term non-linearity in business, we remain confident of the medium to longer-term outlook of the business. Keeping that in view, the Board of Directors has recommended a bonus issue…”

“The Board of Varun Beverages has recommended the Bonus Issue of Equity Shares in the proportion of 1 (One) Equity Share of Rs 10/- each for every 2 (Two) Equity Shares of Rs 10/- each held by the shareholders of the Company as on the record date, subject to the approval of shareholders through Postal Ballot i.e. in compliance with the applicable laws,” the company said in a regulatory filing.