Varun Beverages shares rally over 5%, extend gains for third day on strong growth in Q4 net profit

Varun Beverages stock jumped as much as 5.5% on Tuesday to hit an intraday high of ₹1,559 on the National Stock Exchange of India (NSE). The share price was trading close to its 52-week high of ₹1,561.95 seen on February 26, 2024, but couldn’t hold on to its gains and was trading just about 3% higher at ₹1,520.85 by 12:22 pm.

Varun Beverages has been a consistent performer, with its share price having gained over 10% in 1 month, nearly 50% in 6 months and almost 95% in the past one year.

On Monday, Varun Beverages announced that its revenue from operations grew 10.9% year-on-year to ₹4,317.31 crore in Q1 CY2024 compared to ₹3,893 crore in Q1 CY2023. The company follows the January-December calendar year of reporting.

Profit after tax (PAT) increased 25% to ₹548 crore in the March quarter from ₹438.6 crore a year ago driven by volume growth, an increase in net realisation and improved profit margins.

Varun Beverages informed that total sales volume grew 7.2% to 240.2 million cases in Q1 CY2024 from 224.1 million cases in Q1 CY2023. During the quarter, India territory grew by 4.4% and international markets by 21.9%.

Net realisation per case increased by 3.5% in the March quarter to ₹179.7 on account of the improving product mix in India and the higher contribution of international markets which have higher realisation per case.

The company said that gross margins improved by 385 basis points to 56.3% in the March quarter from 52.4% a year ago primarily due to reduced PET prices as well as the focus on reducing sugar content and light-weighting of packaging.