Any current/future capex/capital investment/strategic investment?

Total CAPEX for H1 CY2023 is Rs. 1,900 crore, with cash outflow of Rs. 1,600 crore. CAPEX includes: - Rs. 850 crore for new greenfield plants in Rajasthan (Bundi, Kota) and Jabalpur (MP). - Rs. 650 crore for brownfield expansion in six existing facilities in India. - Rs. 300 crore for brownfield expansion in international markets. - Rs. 100 crore for land acquisition for future plants. Future CAPEX planned for CY2024, including Rs. 9,000 million in CWIP and capital advances for expansion in Maharashtra, Uttar Pradesh, and Odisha. Expected capitalization for CY24 around Rs. 2,400 - 2,50

Future growth expectations in sales/revenue/volumes?

H1 India growth was 11%; expectation for H2 to maintain similar growth (~11%-12%) if weather cooperates. International markets, especially Morocco and Zimbabwe, showing strong growth, contributing to volume increase. Dairy-based beverages expected to see significant growth from next year due to capacity expansion (tripling capacity). Gatorade anticipated to gain traction from next year following price reduction and product adjustments this year. New greenfield and brownfield plants coming online to support demand, ensuring no capacity shortfall from next year. Revenue potential from

Future growth expectations in earnings/operating earnings/profits/EPS?

The company expects a strong growth trajectory once new capacities, especially in juice and dairy categories, come online, with capacity tripling in these segments next year. Growth in international markets remains robust and is anticipated to continue. Domestic growth in H1 was 11%; future quarters could return to double-digit growth if weather conditions are favorable. EBITDA margin guidance remains stable at 21%-22%, with potential upside if commodity prices stay favorable or seasons improve. CAPEX of Rs. 1,900 crore (H1 CY2023) and continued investments indicate revenue potential of ~1.8x–

Varun BeveragesQ1 FY24Beverages

Varun Beverages Q1 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹420.55P/E: 42.0Market Cap: ₹1.4L CrSector: Beverages

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

H1 India growth was 11%; expectation for H2 to maintain similar growth (~11%-12%) if weather cooperates.
International markets, especially Morocco and Zimbabwe, showing strong growth, contributing to volume increase.
Dairy-based beverages expected to see significant growth from next year due to capacity expansion (tripling capacity).
Gatorade anticipated to gain traction from next year following price reduction and product adjustments this year.
New greenfield and brownfield plants coming online to support demand, ensuring no capacity shortfall from next year.
Revenue potential from new CAPEX estimated at 1.8x–2x of invested amount after stabilization.
Overall focus on expanding complete portfolio and distribution reach, especially in West, South, and East India, enabling growth in non-carbonated beverages.
Growth dependent on weather conditions; favorable season may lead to better-than-expected volume and revenue growth.

Margin guidance

Category 3

The company expects a strong growth trajectory once new capacities, especially in juice and dairy categories, come online, with capacity tripling in these segments next year.
Growth in international markets remains robust and is anticipated to continue.
Domestic growth in H1 was 11%; future quarters could return to double-digit growth if weather conditions are favorable.
EBITDA margin guidance remains stable at 21%-22%, with potential upside if commodity prices stay favorable or seasons improve.
CAPEX of Rs. 1,900 crore (H1 CY2023) and continued investments indicate revenue potential of ~1.8x–2x CAPEX stabilization, targeting Rs. 5,500-5,800 crore revenue from Rs. 2,900 crore CAPEX.
Gatorade growth is expected to accelerate from next year post pricing and product adjustments.
Operating leverage and margin expansion are possible with improved volume growth and normal seasonality.

See what Varun Beverages management said on margin guidance — free account, 30 seconds.

Fundraise plans

- There is no explicit mention of any new fundraising through debt or equity in the current transcript. - The company states that four incremental plants (three in India and one in DRC) will be funded out of internal accruals. - Net debt as of June 30, 2023, has decreased to Rs. 31,716 million from Rs. 34,096 million as of December 31, 2022. - The management expects debt levels to come back closer to last year's level by year-end. - CAPEX for the ongoing projects is primarily being funded internally, with no indication of raising fresh debt or equity. - Financial leverage remains solid with a debt-equity ratio of 0.48x and debt-EBITDA ratio of 0.96x as of June 30, 2023. In summary, there is no current plan for new debt or equity fundraising; expansion is largely funded through internal accruals.

Order book

The transcript does not explicitly mention the current or expected order book or pending orders for Varun Beverages Limited. However, there are related insights regarding capacity and growth: - The company is undertaking a Rs. 1900 crore CAPEX primarily in India to expand capacity. - Post-CAPEX, the capacity will more than support double-digit volume growth. - Revenue potential after full CAPEX stabilization can be approximately 1.8x-2x of the CAPEX amount, indicating expected growth in order intake and sales demand. - Current capacity constraints exist in juices and dairy beverages, but the company is tripling dairy capacity to meet demand. - No specific figures on order book or pending orders were provided. If further detailed data on order book is needed, the Investor Relations team was suggested as the point of contact.

See what Varun Beverages management said on order book — free account, 30 seconds.

Capex plans

Yes

Total CAPEX for H1 CY2023 is Rs. 1,900 crore, with cash outflow of Rs. 1,600 crore.
CAPEX includes:
- Rs. 850 crore for new greenfield plants in Rajasthan (Bundi, Kota) and Jabalpur (MP).
- Rs. 650 crore for brownfield expansion in six existing facilities in India.
- Rs. 300 crore for brownfield expansion in international markets.
- Rs. 100 crore for land acquisition for future plants.
Future CAPEX planned for CY2024, including Rs. 9,000 million in CWIP and capital advances for expansion in Maharashtra, Uttar Pradesh, and Odisha.
Expected capitalization for CY24 around Rs. 2,400 - 2,500 crore.
Plants underway to expand capacity, particularly for juices, dairy, and soft drinks, supporting double-digit volume growth.
New facilities aimed to be operational by December to meet growing demand.
Strategic exploration of South Africa market underway; no formal plans announced yet.

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Varun Beverages Q1 FY24 Earnings Call Analysis

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