Pepsi India bottler Varun Beverages' Q4 profit surges 77% on upbeat demand

Varun Beverages

05/02/2024 07:25

BENGALURU, Feb 5 (Reuters) - Pepsi India bottler Varun
Beverages  VARB.NS  reported a nearly  77% surge in its
quarterly profit on Monday, as it saw double-digit volume growth
across domestic and international markets even as higher costs
of essentials weighed on consumers.
    Consolidated net profit rose to 1.32 billion rupees ($15.9
million) for the fourth quarter ended Dec. 31, compared with
747.5 million rupees in the year-ago period.
    Consumers in cities with higher average incomes, compared
with their counterparts in the hinterlands, have helped makers
of packaged goods pull in massive sales, even in the face of
higher prices of essentials.
    The Gurugram-based company, with operations across six
countries, is one of PepsiCo's  PEP.O  largest franchisee
outside the United States, and packages and distributes
beverages under Pepsi, Mirinda and Tropicana labels.
    Varun Beverages said in its investor presentation that it
saw a 21% surge in its revenue from operations at 27.31 billion
rupees in the reported period, and also an upbeat volume growth.
    The cost of raw materials, which include flavored
concentrate, packaging material and sugar, edged 1.8% higher
during the quarter. 
    Varun Beverages' earnings before interest, taxes,
depreciation and amortisation (EBITDA) margin expanded to 15.7%
from 13.9% a year earlier, aided by softer packaging costs amid
an uptick in sugar prices.
    Last year, the firm announced its foray into the South
African markets with the acquisition of The Beverage Company,
which analysts expect will aid the Indian bottler.
    Additionally, Varun Beverages approved a final dividend of
1.25 rupees per share for the financial year ended Dec. 31.
    Shares of the company, which rose more than 30% during the
December quarter, were trading flat after the results.
    Pepsico Inc is due to report quarterly results on Feb. 09.

    ($1 = 83.0180 Indian rupees)
    

 (Reporting by Ashna Teresa Britto in Bengaluru; Editing by
Sherry Jacob-Phillips)
 ((AshnaTeresa.Britto@thomsonreuters.com;))