Varun Beverages Shares: Shares of Varun Beverages and Delta Corp came under heavy selling pressure this week as investors reacted to the GST Council’s decision to raise tax rates on carbonated and caffeinated beverages.
While Varun Beverages tumbled for the second straight day, Delta Corp also saw losses amid concerns over higher taxation on gaming and related services.
🥤 Varun Beverages: Hit by GST Hike on Soft Drinks
Varun Beverages, the key bottling partner for PepsiCo in India, witnessed another sharp fall on Friday.
- The stock dropped 4.04% to ₹469.70 on the BSE.
- Intra-day, it even slipped 4.28% to ₹468.50 before recovering slightly.
- This comes after Thursday’s nearly 3% fall, extending its two-day loss to about 7%.
Why the fall?
The pressure came after the GST Council approved a tax hike:
- Carbonated beverages (including popular drinks like Pepsi and Coca-Cola):
➡️ Tax rate raised from 28% to 40%. - Fruit-based carbonated beverages and caffeinated drinks:
➡️ Also increased to 40% from 28%.
This sharp jump means higher consumer prices, which could hit sales volumes and margins for beverage makers.
💡 Analyst Take: “With higher taxes, companies will either absorb some impact or pass it on to consumers. Both scenarios could dent near-term profitability,” said a Mumbai-based brokerage firm.
🏛️ GST Council’s Broader Reform
Apart from beverages, the GST Council also announced broader tax restructuring:
- Moving from four slabs (5%, 12%, 18%, 28%) ➡️ to a simpler two-rate system (5% & 18%).
- A special 40% slab will apply to:
- High-end cars 🚘
- Tobacco and cigarettes 🚬
- Race clubs 🏇
- Casinos and gambling 🎰
- Online money gaming 🎮
This indicates the government’s focus on rationalization of GST while keeping luxury and sin goods in the highest tax bracket.
🎰 Delta Corp: Gaming Stock Under Pressure
Delta Corp, India’s only listed gaming and casino company, also saw investors pressing the sell button.
- The stock closed 2.65% lower at ₹84.99.
- During the day, it dipped as much as 3.20% to ₹84.50.
- This follows Thursday’s steep 8.33% decline, as GST now brings its casino and gaming business under the 40% tax slab.
💡 Market View: Analysts expect Delta Corp to face margin compression as higher taxes may discourage players and increase operational costs.
🤖 Meanwhile, a Bright Spot: Netweb’s Big AI Deal
Amid the gloom in beverage and gaming stocks, there was positive news from Netweb Technologies.
The company secured a major AI infrastructure contract from a large Indian-headquartered global technology solutions provider.
Key Highlights of the Deal:
- Netweb will set up an AI infrastructure facility using the latest GPU-accelerated platforms.
- The project is expected to be completed by the first half of FY27.
- Delivery will be through Tyrone Camarero AI platform, purpose-built for:
- Large-scale generative AI
- Foundational model training
- Exascale computing
📊 Order Book Update:
- As of June 30, 2025, Netweb’s order book stood at ₹4,142 crore.
- AI segment contribution:
- Two years ago: 7% of revenue
- Q1 FY26: 29% of revenue
- Growth outlook: Expected to sustain at 40% CAGR.
This indicates a robust pipeline for Netweb, contrasting with the struggles of Varun Beverages and Delta Corp.
📌 Key Takeaways
- Varun Beverages fell 4%, extending a two-day loss after GST hiked taxes on carbonated and caffeinated beverages to 40%.
- Delta Corp dropped 2.65%, hit by inclusion of casinos and gaming in the 40% slab.
- GST reform simplified slabs to 5% and 18%, while keeping a 40% slab for luxury/sin goods.
- Netweb Technologies emerged as a positive outlier with a strong AI contract win, highlighting growth opportunities in the technology sector.
📊 Market Mood
Investors are clearly cautious after the GST announcements. While consumer-facing sectors like beverages and gaming are under pressure, technology and AI-related businesses continue to attract optimism.
👉 In the coming weeks, market focus will likely shift to how companies adjust to the new tax regime — whether they pass the costs to consumers or absorb part of it — and how this impacts demand.
