Varun Beverages Limited has not outlined a companywide pricing plan, even as Mint reported the drinks maker may respond to industry price increases or lower trade spending amid third-quarter packaging pressure.
Mint reported that Varun Beverages expected to align with industry price increases or reduce trade spending. During an Oct. 30 earnings call, management discussed options beverage makers might use if input costs remained high, including price rises, smaller packs and lower trade margins. The call did not set a date or scale for broader action by Varun Beverages.
NDTV Profit separately reported that prices across the company's carbonated soft-drink range had not risen and that Sting's bottle had changed from 300 ml to 250 ml. The outlet's report identifies a smaller pack as an existing change; the call's discussion covered possible industry responses and did not announce a wider company plan.
The margin pressure appeared in results for the quarter ended Sept. 30. Varun Beverages reported a gross margin of 53.1%, down 334 basis points from the year-earlier quarter. The company linked about 300 basis points of the decline to costlier packaging inputs, including can materials, bottle preforms, closures and shrink film. Consolidated volume rose 28.7% to 354.4 million cases, while revenue excluding excise duty increased 33.2% to ₹66,075.6 million.
EBITDA climbed 25.1% to ₹14,267.1 million, but its margin narrowed 140 basis points to 21.6%. Beverage realization per case rose 2.2% across the group and 0.5% in India, the company said. Low- and no-sugar drinks made up 88% of Indian sales, up from 44% a year earlier, helping offset sugar prices that were about 16% higher, according to the company.
EconoTimes previously covered management's conditional view that gross margins had broadly bottomed out in its report on the quarter's margin outlook. Management gave no timetable or scale on the call for broader pricing, pack-size or trade-margin action.
