BENGALURU (Reuters) – Pepsi India bottler Varun Beverages just missed analyst expectations for second quarter profit on Tuesday, dragged by higher raw material expenses despite healthy sales.
Shares of Varun Beverages, which produces and bottles popular beverages such as Mirinda, Mountain Dew and Slice, were down 5.4% at 1595 rupees as of 6:40 a.m. GMT, and is top loser in the fast-moving consumer goods index.
The company, one of PepsiCo’s largest franchisees outside the United States, said its consolidated net profit rose about 26% to 12.53 billion rupees ($149.65 million) in the June quarter, marginally missing analysts’ estimate of 12.59 billion rupees, according to LSEG data.
The company’s expenses surged nearly 29%, primarily due to higher costs of ingredients like sugar, flavorings, carbonated water, packaging materials and other manufacturing inputs.
Gurugram-based Varun Beverages, which operates in six countries, said its revenue from operations rose nearly 29% to 73.34 billion rupees in the second quarter.
India sweltered under unprecedented summer heat that extended into June, lifting demand for cold beverages including soft drinks and lassi.
Varun Beverages also approved an interim dividend of 1.25 rupees per share and recommended split of existing equity shares.
($1 = 83.7300 Indian rupees)
(Reporting by Yagnoseni Das in Bengaluru; Editing by Subhranshu Sahu)
