Shares of Varun Beverages fell as much as 4.39% to ₹396.55 on Friday after the company reported thinner operating margins for the July–September quarter, The Economic Times reported. By 1.34 pm, the stock was at ₹402.25, down 3.03%.
The results
- **Profit after tax:** up 13.5% to ₹830.59 crore, from ₹731.51 crore a year earlier.
- **Revenue:** up 33.2% to ₹6,607.56 crore, from ₹4,960.69 crore.
- **EBITDA:** up 25.1% to ₹1,426.71 crore, but the margin fell 140 basis points to 21.6%.
The board approved an interim dividend of ₹0.50 a share, a total payout of about ₹169.10 crore.
Why margins fell
Gross margin dropped 334 basis points to 53.1%, mainly because packaging materials such as preforms, shrink films, closures and cans cost more amid geopolitical disruptions. A 104% rise in sales of lower-margin non-beverage products, such as preforms and caps, cut domestic gross margins by about 100 basis points.
Why it matters
Varun Beverages bottles and distributes PepsiCo drinks in India and several other countries, so its numbers are a read on soft-drink demand. Sugar prices rose about 16%, but the company largely offset that by shifting to low-sugar and no-sugar drinks, which now make up 88% of its Indian portfolio, up from 44%.
This article reports company results and is not investment advice.