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Varun Beverages Ltd

| Quarterly Financial Results Q3 FY 2025–26

BULLISH SENTIMENT

Report Source

⬤13th Mar 26

Summary : Varun Beverages reports strong FY25 results, expands globally with acquisitions, invests in solar power, and recommends dividend.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Consolidated Cost of Materials Consumed (FY25): ₹93,370.62 million.
  2. Consolidated Employee Benefits Expense (FY25): ₹22,007.43 million.
  3. Standalone Cost of Materials Consumed (FY25): ₹66,018.96 million.
  4. Standalone Employee Benefits Expense (FY25): ₹12,602.18 million.
  5. Consolidated Revenue from Operations (FY25): ₹222,255.84 million.
  6. Consolidated Other Income (FY25): ₹3,523.48 million.
  7. Standalone Revenue from Operations (FY25): ₹145,568.22 million.
  8. Standalone Other Income (FY25): ₹5,139.34 million.
  9. Consolidated Net Cash from Operating Activities (FY25): ₹35,093.14 million.
  10. Consolidated Net Cash Used in Investing Activities (FY25): (₹27,349.39) million.
  11. Consolidated Net Cash (Used in)/Generated from Financing Activities (FY25): (₹12,664.65) million.
  12. Standalone Net Cash from Operating Activities (FY25): ₹25,769.90 million.
  13. Standalone Net Cash Used in Investing Activities (FY25): (₹20,568.87) million.
  14. Standalone Net Cash (Used in)/Generated from Financing Activities (FY25): (₹9,793.94) million.
  15. Consolidated Total Assets (FY25): ₹255,651.56 million.
  16. Consolidated Total Equity (FY25): ₹197,409.55 million.
  17. Standalone Total Assets (FY25): ₹210,002.71 million.
  18. Standalone Total Equity (FY25): ₹187,647.98 million.
  19. Acquisition of FPEL HR2 Energy Private Limited is not a related party transaction, except for VBL's investment.
  20. Both standalone and consolidated financial results are presented.

Corporate Overview

  1. India (home country)
  2. Other countries (e.g., South Africa, Kenya).
  3. Potential financial impact from new Labour Codes, though deemed immaterial by management.
  4. Manufacturing and sale of beverages.
  5. Formal and informative, focused on compliance and financial disclosures.
  6. Consumers in Haryana (for solar power supply).
  7. General consumers for beverages.
  8. Primarily beverages, no separate reportable business segment.
  9. Twizza (subsidiary) has 3 manufacturing facilities with 5 preform and 1 closure line.
  10. Investment in FPEL HR2 Energy Private Limited for captive solar power consumption.
  11. Acquisition of 100% stake in Twizza Proprietary Limited (South Africa).
  12. Incorporation of VBL Industries (Kenya) Limited for beverage operations.

Risk Factors

  1. Uncertainty from new Labour Codes.
  2. Significant cash outflow for investments.
  3. Negative cash flow from financing.
  4. Reliance on other auditors' reports.

Key Drivers

  1. Solar power investment for cost reduction.
  2. Acquisition of Twizza, expanding African presence.
  3. New subsidiary established in Kenya.
  4. Recommended final dividend of ₹0.50.

Auditor’s Report

  1. Unmodified opinion on consolidated and standalone financial results.

Board Commentary

  1. Continuation of Mr. Abhiram Seth as Non-Executive Independent Director, subject to shareholder approval.
  2. Recommended final dividend of ₹0.50 per Equity Share for FY 2025.
  3. Dividend is subject to approval by Equity Shareholders at the AGM.
  4. Incremental impact of new Labour Codes is not material to financial results.
  5. Government of India notified four Labour Codes consolidating 29 existing labor laws.
  6. Investment of up to ₹1.58 Crore in FPEL HR2 Energy Private Limited for solar power.
  7. Acquisition of Twizza Proprietary Limited for ZAR 2,095.00 million.

Corporate Governance

  1. Complied with relevant ethical requirements regarding independence.
  2. Follows Code of Ethics issued by ICAI.
  3. Mr. Abhiram Seth continues as Non-Executive Independent Director.
  4. Mr. Abhiram Seth is not related to any Director.
  5. Audit, Risk Management and Ethics Committee reviewed results.

Management Discussion & Analysis

Future Strategy

  1. Investing in solar power for cost efficiency and environmental benefits.
  2. Expanding international presence through acquisitions and new subsidiaries.

Operational Focus Areas

  1. Reducing power costs through captive solar power generation.

Risk Control Measures

  1. Management assesses the incremental impact of Labour Codes as not material.

Critical Risks

  1. Uncertainty regarding the finalization and impact of new Labour Codes.
Varun Beverages Ltd (VBL) Quarterly Report Analysis & Insights | Dhanarthi