VARUN BEVERAGES 2022-23 Annual Report Analysis

Mon, 11 Mar

VARUN BEVERAGES has announced its results for the year ended December 2023. Let us have a look at the detailed performance review of the company during FY22-23.

VARUN BEVERAGES Income Statement Analysis

• Operating income during the year rose 21.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 29.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 23.0% in CY23 as against 21.7% in CY22.
• Depreciation charges increased by 10.3% and finance costs increased by 42.9% YoY, respectively.
• Other income grew by 104.3% YoY.
• Net profit for the year grew by 35.6% YoY.
• Net profit margins during the year grew from 12.0% in CY22 to 13.3% in CY23.

VARUN BEVERAGES Income Statement 2022-23

No. of Mths Year Ending		12 Dec-22*	12 Dec-23*	% Change
Net Sales	Rs m	129,557	157,641	21.7%
Other income	Rs m	388	794	104.3%
Total Revenues	Rs m	129,946	158,435	21.9%
Gross profit	Rs m	28,061	36,325	29.5%
Depreciation	Rs m	6,172	6,809	10.3%
Interest	Rs m	2,041	2,916	42.9%
Profit before tax	Rs m	20,236	27,394	35.4%
Tax	Rs m	4,735	6,375	34.6%
Profit after tax	Rs m	15,501	21,018	35.6%
Gross profit margin	%	21.7	23.0
Effective tax rate	%	23.4	23.3
Net profit margin	%	12.0	13.3

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VARUN BEVERAGES Balance Sheet Analysis

• The company's current liabilities during CY23 stood at Rs 42 billion as compared to Rs 40 billion in CY22, thereby witnessing an increase of 4.6%.
• Long-term debt stood at Rs 32 billion as compared to Rs 17 billion during CY22, a growth of 84.6%.
• Current assets rose 24% and stood at Rs 42 billion, while fixed assets rose 33% and stood at Rs 110 billion in CY23.
• Overall, the total assets and liabilities for CY23 stood at Rs 152 billion as against Rs 116 billion during CY22, thereby witnessing a growth of 31%.

VARUN BEVERAGES Balance Sheet as on December 2023

No. of Mths Year Ending		12 Dec-22*	12 Dec-23*	% Change
Networth	Rs m	50,995	69,277	35.9
Current Liabilities	Rs m	39,688	41,532	4.6
Long-term Debt	Rs m	17,270	31,889	84.6
Total Liabilities	Rs m	116,182	151,872	30.7
Current assets	Rs m	34,040	42,356	24.4
Fixed Assets	Rs m	82,142	109,516	33.3
Total Assets	Rs m	116,182	151,872	30.7

VARUN BEVERAGES Cash Flow Statement Analysis

• VARUN BEVERAGES's cash flow from operating activities (CFO) during CY23 stood at Rs 24 billion, an improvement of 33.6% on a YoY basis.
• Cash flow from investing activities (CFI) during CY23 stood at Rs -33 billion, an improvement of 93.0% on a YoY basis.
• Cash flow from financial activities (CFF) during CY23 stood at Rs 10 billion, an improvement of 5,589% on a YoY basis.
• Overall, net cash flows for the company during CY23 stood at Rs 879 million from the Rs 36 million net cash flows seen during CY22.

VARUN BEVERAGES Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-22	Dec-23
Cash Flow from Operating Activities	Rs m	17,900	23,908	33.6%
Cash Flow from Investing Activities	Rs m	-17,046	-32,899	-
Cash Flow from Financing Activities	Rs m	-179	9,849	-
Net Cash Flow	Rs m	36	879	2,353.4%

Current Valuations for VARUN BEVERAGES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 16.2, an decline from the EPS of Rs 23.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,236.6, stands at 76.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 23.2 times, while the price to sales ratio stands at 10.2 times.
• The company's price to cash flow (P/CF) ratio stood at 45.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-22*	12 Dec-23*
Sales per share (Unadj.)	Rs	199.5	121.3
TTM Earnings per share	Rs	23.9	16.2
Diluted earnings per share	Rs	11.9	16.2
Price to Cash Flow	x	39.6	45.1
TTM P/E ratio	x	55.4	76.4
Price / Book Value ratio	x	12.7	18.1
Market Cap	Rs m	646,069	1,254,053
Dividends per share (Unadj.)	Rs	1.8	2.5

Ratio Analysis for VARUN BEVERAGES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during CY23, from 0.9x during CY22. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 10.4x during CY23, from 10.9x during CY22. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 30.3% during CY23, from 30.4% during CY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 30.0% during CY23, from 32.6% during CY22. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 15.8% during CY23, from 15.1% during CY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-22*	12 Dec-23*
Current ratio	x	0.9	1.0
Debtors’ Days	Days	8	8
Interest coverage	x	10.9	10.4
Debt to equity ratio	x	0.3	0.5
Return on assets	%	15.1	15.8
Return on equity	%	30.4	30.3
Return on capital employed	%	32.6	30.0

To see how VARUN BEVERAGES has performed over the last 5 years, please visit here.

VARUN BEVERAGES Share Price Performance

Over the last one year, VARUN BEVERAGES share price has moved up from Rs 313.7 to Rs 693.7, registering a gain of Rs 380.0 or around 121.1%.

Overall, the S&P BSE SENSEX is up 1.8% over the year.

(To know more, check out historical annual results for VARUN BEVERAGES and quarterly results for VARUN BEVERAGES)