Q2 2024 Varun Beverages Ltd Earnings Call Transcript
Key Points
- Varun Beverages Ltd (NSE:VBL) reported a robust consolidated sales volume growth of 28.1% for Q2 2024, driven by a 22.9% increase in India.
- The company has expanded its partnership with PepsiCo, securing exclusive snack franchising agreements in Zimbabwe, Zambia, and Morocco.
- Commercial production of carbonated soft drinks and packaged drinking water has commenced at the new greenfield facility in DRC, representing a significant growth opportunity.
- Gross margins improved by 222 basis points to 54.7%, attributed to timely procurement of PET chips and ongoing focus on reducing sugar content and lightweight packaging.
- The Board of Directors approved an interim dividend of 25% of the face value of INR 5 per share and recommended a stock split to enhance retail participation.
- International markets remained relatively flat, with African markets experiencing a seasonally weak quarter.
- Finance costs increased by 86.2% due to new production facilities, the acquisition of Banco, and higher borrowing costs.
- Depreciation rose by 41% in Q2 2024, driven by new production facilities and the acquisition of Banco.
- Net debt increased to INR 58,808 million as of June 30, 2024, up from INR 45,000 million as of December 31, 2023, due to significant CapEx and acquisitions.
- Working capital days increased to approximately 33 days as of June 30, 2024, from around 21 days as of June 30, 2023, due to strategic purchasing and inorganic expansion.
Ladies and gentlemen, good day and welcome to Heron Beverages Limited earnings conference call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes, Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Anoop Poojari from CDR India. Thank you, and over to you.
Yes, thank you. Good afternoon, everyone, and thank you for joining us on water and beverages Q2 CY 2022 Earnings Conference Call. We have with us Mr. WJ. Puja, Chairman of the company, Mr. Varun , tortilla, executive Vice-Chairman and Whole-Time Director. Mr. Raj Gandhi, Group CFO and Whole-Time Director of the company, will initiate the call with opening remarks from the management, following which we'll have the forum open for a question-and-answer session.
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