INDIA – Indian company Varun Beverages, the second-largest bottling company of PepsiCo beverages outside the U.S., has announced an impressive nearly 77 percent surge in its quarterly profit for the fourth quarter ending December 31.

The consolidated net profit rose to US$15.9 million, compared to US$9 million in the same period the previous year. This robust performance is attributed to double-digit volume growth experienced in both domestic and international markets.

Varun Beverages, operating from Gurugram and spanning six countries, stands as one of PepsiCo’s major franchisees globally, packaging and distributing beverages under renowned labels such as Pepsi, Mirinda, and Tropicana.

The company’s operations have seen significant contributions from consumers in urban areas with higher average incomes.

In the investor presentation, Varun Beverages highlighted a remarkable 21 percent surge in revenue from operations, reaching US$328.8 million during the reported period.

Despite facing higher costs of essentials, the company experienced upbeat volume growth. The cost of raw materials, including flavored concentrate, packaging material, and sugar, witnessed a marginal increase of 1.8 percent in the quarter.

Varun Beverages’ Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin expanded to 15.7 percent from 13.9 percent year-on-year, benefiting from softer packaging costs amid a rise in sugar prices.

Last year, Varun Beverages announced plans to enter into the South African market with the acquisition of The Beverage Company in a deal valued at US$158.71 million.

On successful acquisition, the move will enable Varun Beverages to tap into Africa’s largest market, as The Beverage Company bottles and distributes PepsiCo-branded non-alcoholic beverages in South Africa and other neighboring countries.

Furthermore, Varun Beverages has indicated its openness to accepting minority co-investment from a ‘large equity fund,’ according to company filings.

With over 30 manufacturing units in India, the company continues to play a pivotal role as one of PepsiCo’s major franchisees outside the United States, packaging and distributing popular beverage brands.

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