PepsiCo India made a profit in 2017-18 after a gap of seven years

Oct 4, 2018

After a gap of seven years, PepsiCo India has made a profit in 2017-18 due to cost-efficiency measures, higher capacity utilisation and focus on high-margin products. Focus on profitable channels, packs and innovation, cost management and productivity to offset inflation, local agriculture programmes and procurement for citrus and corn, and maximising capacity utilisation were factors that brought balanced growth.

PepsiCo India has reported a net profit of Rs. 190 crore in 2017-18 compared with a loss of Rs. 148 crore a year earlier, it said in the latest filings with the Registrar of Companies. The maker of Pepsi and Mountain Dew soda and Lay’s chips previously reported a profit in 2010-11, the filings showed

Turnover declined 7 per cent to Rs. 5,983 crore in 2017-18. Net sales are not comparable because turnover in the previous financial year was calculated net of the goods and services tax since July last year. Earlier, it was gross of excise duty. The company said it exited the fourth quarter of 2017-18 with double-digit growth momentum.

The company has launched 80 products and variants, including flavours, packaging formats and pack sizes, between 2015 and 2018. It said Lay’s, Kurkure, Quaker and Doritos were the key growth drivers, with ‘encouraging results’ for its new high-margin products Pepsi Black and energy drink Sting and its carbonated portfolio gaining momentum.

PepsiCo had reported global sales that exceeded analyst expectations for April-June 2018, fuelled by its salty snacks, which have consistently offset slowing soft drinks sales. PepsiCo and arch rival Coca-Coca have been countering declining sales of their core soda portfolio with ‘healthier’ drinks such as tea, juices and juice drinks and flavoured water.

PepsiCo India also lost close to a dozen mid-to-senior level executives over the past six months. Industry officials citing data by market researcher Nielsen said Coca-Cola did better, with higher combined shares averaging 50%-plus.

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