Pepsi India bottler Varun Beverages on Monday reported a nearly 77 per cent increase in its quarterly profit, as it saw double-digit volume growth across domestic and international markets even as higher costs of essentials weighed on consumers.
Consolidated net profit increased to 1.32 billion rupees (USD 15.9 million) in the fourth quarter ended 31 December up from 747.5 million rupees in the previous year.
Consumers in cities with higher average earnings, compared to their hinterland counterparts, have enabled packaged goods manufacturers to generate large sales, despite higher prices for essentials.
The Gurugram-based firm operates in six countries and is one of PepsiCo’s major franchisees outside the United States. It produces and sells beverages under the Pepsi, Mirinda and Tropicana labels.
Varun Beverages stated in its investor presentation that its operating revenue increased by 21 per cent to 27.31 billion rupees during the reporting period, as well as volume growth.
The cost of raw ingredients, which include flavoured concentrate, packaging material, and sugar, increased by 1.8 per cent during the quarter.
Varun Beverages’ earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin increased to 15.7 per cent from 13.9 per cent a year ago, supported by lower packaging costs amid rising sugar prices.
Last year, the company announced its entry into the South African market with the acquisition of The Beverage Company, which experts believe will benefit the Indian bottler.
Varun Beverages also approved a final dividend of 1.25 rupees per share for the fiscal year ending 31 December.
Pepsico Inc plans to publish quarterly earnings on 9 February.
