Shares of Varun Beverages (VBL) rose 7% to Rs 1,304.50 on BSE in intraday trade on Tuesday. Shares of the beverage company have soared 12% over the past two sessions after the company posted strong revenue growth in the December quarter (Q4CY22), supported by solid volume growth and higher realisations. In contrast, the S&P BSE Sensex was down 0.22% at 60,375 at 11:40 am.

The company’s operating income rose 27.7% year-on-year to Rs 2,214 crore. Net monetisation grew 6% to Rs 164 mainly due to price hikes on some SKUs, rationalisation of discounts/incentives and an improved mix of smaller SKUs (250ml), especially energy drink Sting with higher net monetisation. Sales in the fourth quarter of 2022 increased by 17.8% to 132 million cases.

EBITDA rose 48.1% year-on-year to Rs 307.5 crore. EBITDA margin improved by 192 basis points to 13.9% in the fourth quarter of 2022. The company said that profit after tax (PAT) more than doubled to Rs 81.5 crore in the seasonally weak quarter from Rs 32.6 crore in the fourth quarter of 2021.

Management said a strong post-pandemic demand recovery and continued efforts to expand its distribution network across markets led to a 41% increase in consolidated volume in FY22. “We are pleased to share that our energy drink Sting has had a remarkable year, making a significant contribution to both volume and growth. As the product is an expanding category, we expect its strong performance to continue in the coming year,” management said.

VBL is a significant player in the beverage industry and one of the largest franchisees of PepsiCo in the world (outside the US). The company produces and markets a wide range of carbonated soft drinks (CSDs) and a variety of non-carbonated beverages (NCBs), including packaged drinking water sold under the PepsiCo trademark.

Over the past month, VBL shares have lost 0.5% and underperformed in the market. In contrast, the S&P BSE Sensex gained 1%. However, it has gained 107% over the past year, compared with a 5% gain for the benchmark index. The stock hit an all-time high of Rs 1,432 on December 12, 2022.