PepsiCo India’s net profit surged to ₹255.75 crore in FY23, up from ₹27.87 crore in FY22, marking its sixth year of profitable growth. Total revenue was up about 29 per cent to about ₹8,129 crore as per the company’s latest RoC filing. The company said it will continue to focus on the strategic growth path and is looking to set up its fifth snacks plant, in Assam.

Ahmed ElSheikh, President, PepsiCo India, told businessline that despite inflationary pressures, the company delivered a strong double-digit revenue growth which was broad-based and supported by both foods and beverages segments.

“In the beverage segment, top-line growth was driven by a strong summer season and uptick in rural demand in FY23. We also focused on expanding distribution. In the foods segment, we saw an underlying volume growth backed by innovations such as Lays Gourmet and Doritos Sizzlin Hot. We also focused strongly on strengthening our presence in affordable pack prices such as ₹5 price,” he added. He said the company was able to expand margins, and growth in profits was driven by net revenue realisation, dialling up productivity and leveraging on scale.

“This is the decade of India. Factors such as strong GDP growth, increase in discretionary spends and low per-capita consumption levels will lead to a positive virtuous cycle,” he added.

Spend on brands up

The company said it will continue to ramp up spending on brands as well as increase capacity. “We have charted out our growth plans for the next several years and have looked at the capacity that we need to deliver this growth. We need to be close to demand centres as well as agro-producing regions. So we are planning to set up a large-scale plant in Assam next,” ElSheikh added. The company currently has four snacks plants in Punjab, Maharashtra, Uttar Pradesh and West Bengal.

“We have set a strategic direction for the organisation. On the one hand rural is a key growth driver and we need to focus on growing penetration by offering products at affordable price-points At the same time, to win in the top-100 cities, we need to strengthen our premiumisation,” he added. The company grew its distribution in two lakh additional outlets in the past two years.

Asked about challenges of this summer season, ElSheikh said that unseasonal rains impacted sales, but June was a resilient quarter. He added that while certain beverage categories are skewed towards summer sales, the company is focused on building consumption occasions throughout the year  “Fortunately, we have begun seeing the tail-end of inflation, but need to watch out for the impact of erratic weather on the next crop cycle. We have also begun seeing signs of recovery in rural demand,” he added.

Responding to a query on intensifying competition with the entry of Reliance, ElSheikh said, “Competition is healthy. It will help growing per-capita consumption levels and expand categories.”

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