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May 02, 2023

If you are looking for a stock that has performed well in the first quarter of 2023, you might want to check out Varun Beverages Limited, the India-based bottler and distributor of PepsiCo products. The company has reported a stellar 69% increase in its net profit for the quarter ended March 31, thanks to higher prices and strong demand for its beverages.

Varun Beverages is the second-largest franchisee of PepsiCo outside the US, and sells popular brands like Pepsi, Mirinda, Tropicana and Aquafina in India and other countries. The company has benefited from the recovery in the food service and hospitality sector, as well as the rising temperature in India, which has boosted the consumption of cold drinks.

The company's consolidated revenue from operations rose by nearly 38% to Rs 39.53 billion in Q1 2023, compared to Rs 28.64 billion in Q1 2022. The company attributed this growth to \"select price increases and robust volume growth across geographies\". The company's consolidated net profit jumped by 69% to Rs 4.29 billion in Q1 2023, compared to Rs 2.54 billion in Q1 2022.

In a statement, the company's chairman Ravi Jaipuria said that the company has delivered a \"strong performance\" despite the challenges posed by the COVID-19 pandemic. He also announced that the board has recommended a stock split of its existing shares in a ratio of 1:2, to make them more affordable and liquid for small investors.

The stock split will result in each existing share of Rs 10 face value being divided into two shares of Rs 5 face value. This will increase the number of outstanding shares from 68.04 crore to 136.08 crore. The record date and ex-date for the stock split will be announced later.

The stock split news sent the shares of Varun Beverages soaring to a record high of Rs 1,467 on Tuesday, before closing at Rs 1,450, up by 0.66%. The stock has gained more than 11 times since its listing in 2016, and has outperformed the broader market this year.

Varun Beverages is one of the leading players in the Indian beverage industry, with a market share of over 50% in carbonated soft drinks and over 35% in packaged drinking water. The company has a presence in 28 states and seven union territories in India, as well as in Nepal, Zimbabwe, Morocco, Zambia and Sri Lanka. The company also operates KFC and Pizza Hut restaurants in some regions through its subsidiary Devyani International Limited.

The company has been expanding its product portfolio and distribution network to tap into new opportunities and cater to changing consumer preferences. The company has recently launched new products like Pepsi Black, Mountain Dew Ice and Tropicana Essentials Fruits & Veggies. The company has also invested in solar power projects to reduce its carbon footprint and energy costs.

The company expects to maintain its growth momentum in the coming quarters, as it leverages its strong brand equity, operational efficiency and innovation capabilities. The company also hopes to benefit from the ongoing vaccination drive and easing of lockdown restrictions in India and other markets.