Varun Beverages Declares 1:2 Bonus Shares: Details Inside

Varun Beverages said on Thursday that its board of directors approved a bonus issue of equity shares in the proportion of one for every two shares owned by the shareholders.

The company has informed BSE by saying that "The Board of Directors at their meeting held today (started at 11:00 A.M. and concluded at 11:45 A.M.) inter-alia considered and recommended the Bonus Issue of Equity Shares in the proportion of 1 (One) Equity Share of Rs. 10/- each for every 2 (Two) Equity Shares of Rs. 10/- each held by the shareholders of the Company as on the record date, subject to the approval of shareholders through Postal Ballot i.e. in compliance with the applicable laws."

According to the company the estimated date by which such bonus shares would be credited/dispatched is Within 2 months from the date of Board approval i.e. by June 27, 2022 and the record date for the same is yet to be announced.

"During the year ended 31 December 2021, the Company has issued 144,344,360 bonus equity shares of ? 10/- each as fully paid-up bonus equity shares in the ratio of 1 (One) equity share of ? 10/- each for every 2 (Two) existing equity shares of ? 10/- each. Accordingly, earnings per share for the three months period ended on 31 March 2021 has been calculated based on number of shares outstanding in respective period, as increased for issuance of bonus shares," the company has said in a regulatory filing.

Based on the consolidated financial results for the quarter ended on 31 March 2022, the company's Varun Beverages' income from operations grew 26% to Rs 2,867.47 crore from Rs 2,269.87 crore in the same quarter last year, while its net profit climbed to Rs 254 crore from Rs 129 crore in the same quarter last year (YoY). From 151.4 million cases in Q1 CY2021 to 179.7 million cases in Q1 CY2022, total sales volume increased by 18.7% to 179.7 million cases. From 151.4 million cases in Q1 CY2021, total sales volume increased by 18.7% to 179.7 million cases in Q1 CY2022. Gross margins for Q1 CY2022 decreased by 427 basis points to 51.5 percent from 55.8 percent in Q1 CY2021, primarily due to a 30 percent increase in preform prices over Q1 CY2021, while PAT increased by 98.2 percent to Rs. 2,710.9 million from Rs. 1,367.6 million in Q1 CY2021, owing to improved margins, lower finance costs, and higher profitability from our international operations.

Commenting on the performance for Q1 CY2022, Mr. Ravi Jaipuria, Chairman - Varun Beverages Limited said, "We have started the year on a strong note, delivering notable growth across all parameters. Robust demand in both domestic and international markets, also supported by the early onset of summer in India, translated to healthy volumes during the quarter. This along with improved net realizations resulted in a solid net revenue growth of 26.2% in Q1 CY 2022. On the profitability front as well, we have delivered enhanced performance despite significant increase in input costs during the quarter. Our EBITDA grew by 39.1% and our margins improved to 18.8% in Q1 CY 2022."

"On the demand front, we are seeing a solid uptick in consumption. The summer season in the domestic market has begun well and as we enter the peak months, we are well prepared to cater to the anticipated demand by optimizing our capacity utilization across all our plants and further enhancing our reach across established and underpenetrated markets. During the quarter, the Board approved the proposal to manufacture "Kurkure Puffcorn" for PepsiCo India as part of their network of co-packers. The commercial production is expected to begin from Q3 CY 2022," he further added.

"As we look ahead, on the back of an improving demand environment, we remain confident of delivering healthy volume growth in the medium to longer term. We are also happy to share that as a token of appreciation to all our shareholders, the Board today has recommended a bonus issue of 1 equity share for every 2 equity shares held by shareholders of the Company as on the record date. Overall, our initiatives towards improving our market share, building infrastructure, and expanding reach continue to hold us in good stead and we are confident of delivering strong and sustainable growth going forward," said Mr. Ravi Jaipuria.

On the NSE, the company's shares have increased by 69.51 per cent in a year, while the stock has increased by 21.08 per cent year-to-date (YTD). The stock has risen 25.43 per cent in the last six months and 14.05 per cent in the last month. The stock has gained 0.28 per cent in the previous five trading days and is presently trading at Rs 1,065.35, up 2.78 per cent today. The stock hit a 52-week high of Rs 1,147.00 on April 26, 2022 and a 52-week low of Rs 600 on April 27, 2021. It is now down 7% from its 52-week high. Varun Beverages Ltd. is trading higher above the 5 days, 20 day, 50 days, 100 day, and 200-day moving averages, according to Bloomberg Quint, from its current market price of Rs 1,065 as of Apr 28, 14:47.