Varun Beverages revenue up 28.3%, company announces dividend, yet why share price falls?

Shares of Varun Beverages closed down 6.49% at 1,576.00 today on July 30. The company today announced June quarter results, after which its shares have been on a selloff. On a calendar year basis, the company's profit after tax in the second quarter rose 25.5 percent to Rs. 1261.83 crore, while in the same quarter last year it was Rs. 1,005.42 crores. Varun Beverages said the increase in profit was due to volume growth and good margins.

Varun Beverages revenue also increased by 28.3%, so why did the shares fall?

Varun Beverages, PepsiCo's largest franchisee in the world outside the US, said its revenue rose 28.3 percent in the second quarter to Rs. 7196.86 crore as compared to Rs. 5611.40 crores. The company had expected 25-43 percent growth in net profit and 25-35 percent growth in sales for the quarter.

Now the question is, what is the reason for the decline in the company's stock despite the good results? Actually, the reason for this is the stock split announcement. Due to this decision of the company, its shares are going to get cheaper. This is the second time in a year that the company is going for a stock split.

Details regarding stock split of Varun Beverages

The board in its meeting today approved the sub-division/division of the existing equity shares, Varun Beverages said in an exchange filing. The company has decided to split the shares in the ratio of 2:5. However, this share split is subject to the approval of the equity shareholders of the company. Varun Beverages has not announced a record date to determine the eligibility of shareholders to participate in this stock split. The company said the record date will be announced in due course.

Varun Beverages announces dividend

In addition to the stock split, Varun Beverages has paid Rs. A dividend of 1.25 has also been declared. From August 13, 2024 the interim dividend will be paid to the shareholders whose names appear in the register of members of the company or in the list of beneficial owners maintained by the depository till August 9, 2024. Varun Beverages said the total cash flow was Rs. 162.43 crore will be.