PepsiCo India posts solid single digit revenue growth
PepsiCo India posted “solid mid-single-digit organic revenue growth” as strong marketplace execution and stable macro conditions spurred expansion across its key international markets.
“We are pleased with the more than 6% organic revenue growth we saw in our developing and emerging market as a group,” chief executive officer Indra Nooyi said on an earnings call on Tuesday night. “The international results are in part a reflection of our efforts to increasingly lift and shift successful initiatives from one market to many and innovating on global brands in locally relevant ways.”
PepsiCo did not specify the numbers of its India business. Analysts had expected the momentum of consumption demand and the receding impact of the goods and services tax in India to lead to improved earnings across consumer goods in the three months ended June.
While the company’s soft drinks sales have stumbled in India and overseas, its earnings for the 12 weeks ended June 16, announced, exceeded analysts’ expectations, mainly riding on its salty snacks business.
The maker of Pepsi and Mountain Dew, Tropicana juices, Lay’s chips and Kurkure snacks has been grappling with lower market share in its mainstay carbonated drinks business as consumers switch to healthier beverages.
PepsiCo India president Ahmed El Sheikh told ET in an interview in May that the company would be selective in the categories it would focus on for profitable growth. “We need to be very sure where we will put our investments. To widen market share, we need to grow at a faster pace than the industry,” Sheikh, the first expat head of PepsiCo India, had said.
“On a favourable base, we expect most FMCG companies to report double-digit sales growth… GST was implemented from July 1, 2017, onwards, and the preceding quarter was adversely impacted by the destocking ahead of GST implementation. EBITDA growth will be robust amid benign raw material prices,” India Infoline wrote in a report.
Nooyi said that PepsiCo has committed to voluntarily remove trans-fats from snacks by reducing added sugars, sodium and saturated fats across all markets.
“We are in millions of pantries and refrigerators worldwide. So we know we have a tremendous opportunity and responsibility to use our scale to make a positive impact,” she said.