PepsiCo India witnessed a remarkable growth in its net profit for the fiscal year 2022-2023, reaching INR 255.75 crore compared to INR 27.87 crore in the previous fiscal year (2021-2022), achieving its sixth consecutive year of profitable expansion. The latest Registrar of Companies (RoC) filing reveals a substantial increase of approximately 29 percent in total revenue, reaching around INR 8,129 crore. The company’s forward-looking plans emphasize a dedicated commitment to strategic growth, highlighted by its intention to establish a new snacks plant in Assam, which will mark its fifth facility dedicated to snacks production.
Ahmed ElSheikh, the President of PepsiCo India, stated that even in the face of inflationary pressures, the company achieved robust double-digit revenue growth. This growth was well-diversified and bolstered by contributions from both the food 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 INR 5 price,” he added.
He mentioned that the company successfully widened its margins, with profit growth being propelled by effective net revenue realization, enhanced productivity measures, and capitalizing on economies of 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.
The company indicated its intention to persist in escalating investments in brand development while also expanding its production 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.
At present, the company operates four snacks plants located 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.
Over the last couple of years, the company extended its distribution to an additional two lakh outlets.
When questioned about the challenges posed by the current summer season, ElSheikh mentioned that unanticipated rainfall had an impact on sales. However, he noted that June remained a resilient quarter. He further stated that although certain beverage categories traditionally thrive during the summer months, the company’s emphasis is on creating consumption opportunities that span the entire 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.”
