Varun Beverages Ltd — Q2 FY24
Varun Beverages delivered a strong Q2 CY2024 with consolidated revenue of ₹7,197 crore (+28.3% YoY) and EBITDA of ₹1,991 crore (+31.8% YoY), driven by 22.9% volume growth in Ind...
bullish
high
✓ Verified against BSE filing
Bear Cases vs Reality
The market's top concerns about Varun Beverages, tested against this quarter's numbers.
! Still alive
DRC plant startup delays
The bear thesis
Management promised DRC plant commercial production in Q2 CY24, but Q2 commentary only mentions it commenced production in July, suggesting a delay.
What the numbers say
DRC plant commercial production status in Q2 CY24
DRC plant commenced production in July 2024 (Q3 CY24), missing the Q2 CY24 target. This is a clear miss on guidance.
The DRC plant started in July, one quarter later than promised. This confirms execution risk and keeps the bear case alive.
Source: Undelivered promise
↓ Weakening
Weather and seasonality risk in H2 India
The bear thesis
Excessive rains or harsh winters could dampen out-of-home consumption and pressure volume growth in the second half of the calendar year.
What the numbers say
India volume growth in Q2 CY24 (peak summer quarter)
India volume grew 22.9% YoY in Q2 CY24, driven by strong summer demand. This is a positive sign for H2, but the risk remains for the upcoming quarters.
Strong 22.9% volume growth in India during Q2 shows robust demand, alleviating near-term weather concerns. However, H2 weather risk remains for future quarters.
Source: From analyst Q&A