India's Varun Beverages misses quarterly profit view as competition bites
PEP•Profit misses estimates as competition rises
Varun Beverages reported quarterly profit below average analyst estimates on Tuesday as PepsiCo's biggest bottling partner in India saw rising competition and margin pressure, sending its shares down nearly 9%.
The company reported a consolidated net profit of 15.21 billion rupees ($158.71 million), below estimates of 15.33 billion rupees, according to data compiled by LSEG.
Revenue and volume grow despite weaker margins
Overall revenue rose 20.8% to 86.51 billion rupees during the period.
Consolidated sales volume grew by 19.8%, however the company last year had noted that it saw unusually high and unseasonal rainfall in India, resulting in weaker demand and volume growth in the year-ago period.
Shares fall on competition and margin pressure
Varun Beverages is facing intensifying competition in India's ready-to-drink market as established rivals and new entrants expand aggressively across soft drinks, juices, and packaged water.
Shares of the company tanked as much as 8.9% after results before trimming some losses to trade 7.6% lower.
Varun Beverages' operating profit margin fell 76 basis points from last year due to the consolidation of low-margin South African unit Twizza, it said.
