Varun Beverages reported revenue/Ebitda/PAT growth of 29%/28%/33% YoY. Gross/Ebitda margins contracted by 171bps/20bps YoY largely to inferior product mix. Net realisation per case declined 0.9% YoY, largely due to lower realisation in own brands in South Africa. Notably, realisation per case grew 1.8% in India and remained flat in International (ex. South Africa). Depreciation increased by 45% YoY on account of commissioning of new plants of last year (Supa, Gorakhpur and Khordha) and consolidation of SA & DRC. This was offset by lower finance cost (down 56% YoY) and higher other income, leading to PAT growth of 33% YoY.
NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
-
Indian Markets Turning Corner After Two Tough Years, Says Sandeep Tandon -
NDTV Profit Ignite 2026: Experts See Opportunity In Equities, Stay Bullish For Long-Term -
Buy Right, Sit Tight Does Not Work for Individual Stocks, Says Dinshaw Irani -
'Worst Is Behind': Quant MF Sees Market Bottom, Flags 'Extreme Euphoria' In Midcaps -
India's Mutual Fund Industry Could Become A $1 Trillion Opportunity, Say Fund Managers -
'Foreign Investors Are Baraatis': Raamdeo Agrawal's Take On LTCG Tax -
Stay Invested Through Market Cycles: Raamdeo Agrawal at NDTV Profit Ignite -
Ramesh Damani Remains Bullish On India For Next 20-30 Years, Sees Bargains Amid Market Weakness -
CAS Came After A Long Consultation Process: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFIT IGNITE -
Aim To Cut FPI Onboarding Time From Mth To Five Days: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFI
ICICI Securities Report
Varun Beverages Ltd.'s Q1 CY25 performance was marginally ahead of our estimates with revenue/ Ebitda/ PAT growing by 29%/ 28%/ 33% driven by 30% volume growth. Despite increase in competitive intensity, India business performance was resilient with revenue growth of 18% driven by 15.5% volume growth.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
We note that, the pricing action in CSD to fight competition and unseasonal rain in select geographies could marginally impact the performance in Q2 CY25. However, over the long term, the performance would be driven by strong execution and new product launches.
In international business, South Africa is scaling up well with 13% volume growth over the last four quarters and margin improvement (14% from 10.5% at the time of acquisition) driven by scaling down of non-profitable products.
We remain positive on Varun Beverages' strong business outlook but its current valuations seem stretched. Maintain Hold.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
