Varun Beverages eyes boost from GST cuts in Water and Juice segments
Varun Beverages expects GST cuts on water and juice to boost demand, plans to pass benefits to consumers, expand retail reach, and increase capacity, while maintaining stable margins amid market challenges.
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Varun Beverages, PepsiCo’s bottling partner in India, expects a boost in demand for its water and juice segments following recent GST rate reductions, Chairman Ravi Kant Jaipuria told CNBC TV-18. The company plans to pass the tax benefits directly to consumers and expand capacity to meet rising demand.
Jaipuria explained that the GST cuts cover around 30% of Varun’s volumes, with rates on water dropping from 18% to 5% and juice from 12% to 5%. While carbonated soft drinks remain unaffected at 40%, the overall reduction is expected to stimulate consumption and benefit the wider beverage industry.
Demand is anticipated to pick up by the end of the current quarter, following a slowdown in previous quarters due to heavy rainfall. Despite weather-related challenges, the company reported flattish volumes, which it considers a strong outcome for the sector.
In parallel, Varun Beverages is actively expanding its retail footprint, adding 8–10% more outlets annually, roughly four to five lakh new points of sale, capitalizing on India’s low per-capita beverage consumption.
Margins remain stable at 20–25%, aided by new large-scale plants, and the company is optimistic about sustaining profitability while leveraging GST-driven demand growth.
