Despite rising revenue, PepsiCo India Holdings again in the red

Reports a standalone net loss of Rs 280 cr in 2013-14 on a turnover of Rs 7,217 cr

The revenue of PepsiCo India Holdings, a key subsidiary of American food & beverage giant PepsiCo Inc, has risen consistently in the past five years - 121.3 per cent from Rs 3,261.3 crore in 2009-10 to Rs 7,216.6 crore in 2013-14 - but the company has reported annual losses thrice during this period.

In 2013-14, PepsiCo India Holdings incurred a net loss of Rs 280 crore, compared with a profit of Rs 17.6 crore the previous year, showed the company's filings with the registrar of companies (RoC). This was in spite of its revenue rising 3.2 per cent from Rs 6,994.8 crore in 2012-13.

PepsiCo India Holdings, in the business of manufacturing and sale of concentrates, aerated & non-aerated beverages, potato chips and fried namkeens, is also involved in trading of various agro and non-agro products, according to the RoC filing.

PepsiCo Inc earns from several entities in India but PepsiCo India Holdings remains a major revenue contributor. "We operate under different legal entities in India for our various businesses," said a spokesperson for PepsiCo India, declining to comment on the financials.

The loss in 2013-14, however, was partly on account of PepsiCo India Holdings' amalgamation with Aradhana Foods and Juices Pvt Ltd, which had "significant" carry-forward losses (including unabsorbed depreciation), according to the RoC filings. Aradhana Foods was one of the subsidiaries.

During 2013-14, PepsiCo India Holdings also adjusted losses of its subsidiaries - Rs 37.5 crore of Aradhana Drinks and Beverages, Rs 91.1 crore of Aradhana Foods and Juices and a marginal one of Lehar Foods - according to the auditors' report.

PepsiCo Inc Chairperson & Chief Executive Indra Nooyi had said in an investors' call last month that the company's business in India was growing at a double-digit rate and the country was a "high-priority market" for PepsiCo. She had also said the company planned to infuse about Rs 33,000 crore by 2020 to ramp up operations here.

PepsiCo India Holdings' losses, in three of the past five years, have primarily been on account of its amalgamation with subsidiaries that had losses in their books. As part of operational restructuring, for the past few years, PepsiCo Inc has been merging its many operating subsidiaries.

After a net profit of Rs 63.5 crore in 2009-10, PepsiCo India Holdings reported losses the next two years - of Rs 56 lakh in 2010-11 and Rs 314.7 crore in 2011-12. Then, it was briefly in the green, with a net profit of Rs 17.6 crore in 2012-13, before again slipping into the red during the financial year ended March 2014.

The company has 42 plants across India and its eight brands - Pepsi, 7UP, Mirinda, Slice, Mountain Dew, Aquafina, Lays and Kurkure - together generate estimated annual retail sales of Rs 1,000 crore or more.

Recently, PepsiCo decided to sell all company-owned bottling operations in North India to its franchisee bottling partner, Varun Beverages. With this deal, Varun gets 13 of PepsiCo's bottling plants and its total count of bottling units (including those in Sri Lanka, Mozambique, Zambia and Morocco) reaches 19. PepsiCo also runs 10 company-owned manufacturing facilities in the southern and western parts of India.