Varun Beverages Ltd, a prominent player in the beverage industry and has been in a longstanding partnership with PepsiCo since the 1990s and holds a significant market share in the beverage industry. It is recognized as one of the largest franchisees of PepsiCo worldwide. The company specializes in the production and distribution of a diverse array of beverages, including carbonated soft drinks, non-carbonated drinks, and packaged water. These beverages are sold under various trademarks owned by PepsiCo.
Varun Beverages Ltd offers PepsiCo brands products such as Pepsi, Seven-up, Mirinda Orange, Mountain Dew, Tropicana Juices, Sting, etc in 27 States and 7 Union Territories in India. In addition, VBL has the right to distribute PepsiCo products in places like Nepal, Sri Lanka, Morocco, Zambia, and Zimbabwe.
Today VBL Ltd announced that it has been recognized as the “PepsiCo’s International Bottler of the Year 2022,” a prestigious title. This remarkable achievement, received for the second time, reaffirms VBL’s unwavering dedication to operational excellence, strong governance practices, and sustainability initiatives.
The title of PepsiCo’s International Bottler of the Year is the highest annual honour bestowed upon a bottling partner. This award acknowledges VBL’s outstanding performance in the market and the significant investments the company has made to enhance its operations and capabilities. VBL’s continuous efforts to improve manufacturing facilities, enhance supply chain efficiency, and expand distribution networks have positioned it as a premier global partner for PepsiCo.
Today, Varun Beverages Ltd (VBL) commenced trading at Rs 1690, experiencing a slight decline of Rs 3.55 from the previous day’s closing price of Rs 1693.55. As of now, the stock is being traded at around Rs 1702 on the BSE. The company holds a total market capitalization of Rs 110,753 Crores. Its 52-week high is RS 1747.15 and its 52-week low is Rs 702.32. Notably, the stock has delivered an impressive return of approximately 130% in the last year, while over three years, it has yielded a remarkable return of over 500%.
In the fourth quarter of FY23, Varun Beverages Ltd (VBL) recorded a revenue of Rs 3,893 crore, marking a significant YoY increase of 37.68% from Rs 2,827 crore. The company’s operating profit for the quarter stood at Rs 798 compared to Rs 531 in Q4FY22, representing an operating margin of 20%. VBL’s net profit during the same period reached Rs 439 crore, a notable rise from Rs 271 Crore, with a margin of 11.2%.
The company’s ROCE and ROE stand at 27.8% and 33.5%, respectively. Additionally, VBL has a debt-to-equity ratio of 0.76 times, indicating a balanced financial structure. Based on the latest quarterly update, the promoter holding in the company is at 63.90%, while FIIs and DIIs hold 26% and 3.67%, respectively.
With a robust foothold in the market, particularly in the beverage segment, the company enjoys a competitive advantage by holding the franchise of popular PepsiCo brands, which consistently attract a trendy consumer base, particularly teenagers. The increasing demand for soft drinks among the general population positions this company for potential growth and reaching new heights.
Over the past decade, the company’s balance sheet size has witnessed substantial expansion. Investors must keep this company on their radar and may become a good investment option.