Shares of Varun Beverages (VBL) tanked nearly 5% on Tuesday following the release of its earnings for the quarter ending in June.

What Happened: PepsiCo bottler reported a consolidated net profit of ₹1,252.6 crore, marking a 26% increase compared to ₹994 crores in the same quarter last year. Last quarter, the company recorded a net profit of ₹547.9 crore.

The FMCG major's revenue from operations, for the period reached ₹7,196.8 crore, up by 28.2% year-on-year from ₹5,611.4 crore. The profit was in line with Bloomberg’s estimates of around ₹1,976 crore, revenue, on the other hand, fell a bit short of the ₹7,344 crore forecast.

EBITDA increased by 31.8% to ₹1,991.2 crore and EBITDA margin improved by 74 bps to 27.7% in the period, led by higher gross margins, the company said in the press release.

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The company's Board of Directors has approved an interim dividend of ₹1.25 per share. The board has also approved a 2:5 share split.

"The Board has considered and recommended the sub-division/split of existing equity shares of the company from 1 equity share with a face value of ₹5 each fully paid-up into such number of equity shares having face value of ₹2 each fully paid-up," it said.

Varun Beverages is one of the largest franchisees of PepsiCo in the world. It produces and sells beverages including Pepsi, Pepsi Black, Mountain Dew, Sting, Seven-Up and Mirinda.

Price Action: Varun Beverages was trading 4.71% lower at 1,606 after announcing results on Tuesday afternoon.

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