(Reuters) – Pepsi India bottler Varun Beverages reported fourth-quarter profit below analysts’ estimates on Monday, as higher raw material costs overshadowed volumes growth driven by its expansion in Africa.
Shares of the company, which is one of PepsiCo’s largest franchisees outside the United States, fell about 1.8%.
Net profit rose more than 40% from a year earlier to 1.85 billion rupees ($21.12 million) in the quarter ended December 31. However, that missed analysts’ average estimate of 2.11 billion rupees, according to data compiled by LSEG.
Revenue from operations rose 39.8% to nearly 38.18 billion rupees, while expenses jumped 41.3% due to an increase in the costs of raw materials such as sugar, flavourings, glass bottles, and packaging, and higher value-added taxes.
Varun Beverages, which packages and distributes beverages under Pepsi, Mirinda and Tropicana labels, is expanding its presence in several African countries, including South Africa, Ghana and Tanzania, citing robust demand potential.
“Consolidated volumes increased by 23.2%, largely led by new territories,” Chairman Ravi Jaipuria said in a presentation to investors.
The Gurugram-based company said its domestic volumes increased 11.4% during the quarter.
($1 = 87.5925 Indian rupees)
(Reporting by Ananta Agarwal in Bengaluru; Editing by Subhranshu Sahu)
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