Coca-Cola to Ramp Up Spending to Battle Pepsi in India

Coca-Cola Co (NYSE:KO), the largest soft-drink maker in the world, plans to significantly ramp up its investments in India — the world’s second-fastest growing major economy. The move is a strategic play to keep abreast of competition in the region from Pepsi (NYSE:PEP).

The company plans to invest about $2 billion between now and 2017 to grow its market for alcohol-free, ready-to-drink beverages in India. Incidentally, the amount totals what Coke (NYSE:KO) has spent in India over the last 18 years. The amount would be spent on enhancing capacity, boosting distribution, cold drink equipment, and in consumer marketing and brand building.  Coke’s (NYSE:KO)employees number about 25,000 in India.

Coca-Cola Co’s (NYSE:KO) emphasis on foreign investment is understandable given that most of its revenues are now generated internationally. However, the Company recently warned foreign exchange fluctuations that worked in favor of the company’s profitability in a weak dollar regime may now have an adverse impact given the dollar’s appreciation in recent times.

Here’s how Coke and Pepsi are trading:

  • The Coca-Cola Company (NYSE:KO): The shares recently traded at $67.65, down $0.47, or 0.69%. Its market capitalization is $153.65 billion. They have traded in a 52-week range of $61.29 to $71.77. Volume today was 854,603 shares versus a 3-month average volume of 10,802,600 shares. The company’s trailing P/E is 12.44, while trailing earnings are $5.44 per share. The company pays a dividend of $1.88 per share for a dividend yield of 2.80%. About the company: The Coca-Cola Company manufactures, markets, and distributes soft drink concentrates and syrups. The Company also distributes and markets juice and juice-drink products. Coca-Cola distributes its products to retailers and wholesalers in the United States and internationally. Get the most recent company news and stock data here >>
  • Pepsico, Inc. (NYSE:PEP): The shares recently traded at $62.81, down $0.47, or 0.74%. Its market capitalization is $98.20 billion. They have traded in a 52-week range of $58.50 to $71.89. Volume today was 610,980 shares versus a 3-month average volume of 9,481,280 shares. The company’s trailing P/E is 15.75, while trailing earnings are $3.99 per share. The company pays a dividend of $2.06 per share for a dividend yield of 3.30%. About the company: PepsiCo, Inc. operates worldwide beverage, snack and food businesses. The Company manufacture or uses contract manufacturers, market and sell a variety of grain-based snacks, carbonated and non-carbonated beverages and foods in countries throughout the world. Get the most recent company news and stock data here >>

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