Sin tax effect: Varun Beverages shares lose fizz, fall below Rs 500 mark in early deals

Shares of Varun Beverages slipped 3% in early deals on Thursday after GST Council on Wednesday approved a hike in tax rate on carbonated beverages to 40 per cent from 28 per cent at present. The stock of Pepsico bottler slipped 2.97% to Rs 490 against the previous close of Rs 505 on BSE. Market cap of the firm fell to Rs 1.68 lakh crore. 

A total of 2.62 lakh shares of the firm changed hands, amounting to a turnover of Rs 12.96 crore. 

The FMCG stock has fallen 23% this year and slipped 18% in a year. However, the stock has gained 141% in three years and risen 658% in five years. 

The council also hiked the GST rate on caffeinated beverages to 40 per cent from 28 per cent.

Prime Minister Narendra Modi in his Independence Day speech had announced the move to simplify the tax regime. The tax refform comes as India's exports to the US face a 50 per cent tariff - the highest in the world.

Varun Beverages follows a calendar year of reporting (January to December).

Varun Beverages reported a 5% rise in net profit for the quarter ended June 2025. Profit climbed to Rs 1325.4 crore in Q2 against Rs 1261.83 crore on a YoY basis. Revenue fell 2.5% to Rs 7017.3 crore in Q2 against Rs 7196.8 crore in the year ago period. 

Varun Beverages is a beverage company. It operates franchisee of PepsiCo. The company produces and distributes a range of carbonated soft drinks (CSDs), as well as a large selection of non-carbonated beverages (NCBs), including packaged drinking water sold under trademarks owned by PepsiCo.