Varun Beverages
Varun Beverages
Beverages F&OKey Fundamentals
LargecapNon Alcoholic BeveragesBeveragesTapetide Score
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Key Insights
Strengths
2- Company has delivered good profit growth of 50.2% CAGR over last 5 years
- Company's median sales growth is 23.2% of last 10 years
Weaknesses
2- Stock is trading at 7.35 times its book value
- Promoter holding has decreased over last 3 years: -3.66%
Growth Rate
AI Analysis — Bull vs Bear
Varun Beverages has a market capitalisation of about ₹1,44,948 crore and trades at 43.1x earnings and 7.51x book value. Its long-term record includes 5-year compounded profit growth of 50% and sales growth of 27%, but growth is slowing: TTM sales growth is 14% and profit growth is 19%. ROE fell to 16% last year from a 3-year average of 21%, and the stock has returned -2% over 1 year and 5% CAGR over 3 years, well below its 29% 5-year CAGR.
- Profit has compounded at 50% CAGR over 5 years and 40% over 10 years, showing that growth has lasted through several business cycles.
- Median sales growth over the last 10 years is 23.2%, and 10-year compounded sales growth is 20%. Growth has been steady over a long period, not a one-off spike.
- TTM profit growth of 19% is ahead of TTM sales growth of 14%, which suggests operating leverage or better margins even as revenue growth slows.
- 3-year profit CAGR is 24%, but the stock's 3-year CAGR is only 5%. The valuation multiple has compressed a lot relative to earnings over this period, so less optimism may be priced in than before.
- ROE has stayed around 21-22% on average over 3, 5 and 10 years (21%, 22% and 21%), a history of consistent capital efficiency for a capital-intensive bottling business.
- 3-year sales CAGR of 18% is still high for a large-cap FMCG company with a market cap of about ₹1,44,948 crore, a scale at which double-digit growth is usually hard to sustain.
- Relative to 3-year profit growth of 24%, the P/E of 43.1 gives a PEG ratio of about 1.8, which is moderate compared with the P/E alone.
- Sales growth is slowing steadily: 27% over 5 years, 18% over 3 years and 14% TTM. This raises the question of whether earlier growth rates can continue.
- ROE fell to 16% last year from a 3-year average of 21% and a 5-year average of 22%. Recent capital added to the business is earning lower returns so far.
- At 43.1x earnings the earnings yield is only about 2.3%, and at 7.51x book the market is valuing the company at roughly ₹1,44,948 crore against implied book equity of about ₹19,300 crore. That leaves little room for disappointment if growth slows further.
- Promoter holding has fallen 4.18 percentage points over the last 3 years, which some investors may read as lower promoter commitment or an overhang from equity dilution.
- Shareholder returns have been weak recently: -2% over 1 year and 5% CAGR over 3 years, compared with 29% CAGR over 5 years. Market sentiment has cooled even though profits kept growing.
- The dividend yield of 0.23% offers very little income support, so returns depend almost entirely on growth continuing and the valuation multiple holding.
- On TTM profit growth of 19%, the P/E of 43.1 gives a PEG ratio of about 2.3, higher than the multiple implied by longer-term growth rates. The valuation looks richer if growth settles near recent levels.
- The business depends on a single franchise relationship (PepsiCo) and on weather-sensitive seasonal demand. For a company valued at about ₹1,44,948 crore, one disrupted summer season or a change in franchise terms could have an outsized effect on growth, which is currently running at 14% TTM on sales.
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
- COO Manmohan Paul resigns Sep 24
Chief Operating Officer Manmohan Rupal Paul resigned effective September 24, 2026, and Executive Vice Chairman Varun Jaipuria accepted the resignation. The senior operational exit comes while VBL is expanding in Africa and moving into alcobev.
- Rich valuation, thin rally volumes Sep 22
The stock trades at a trailing PE of 48.81, and it remains down 5.97% over the past year. The five-session rally came on just 31.29 lakh shares, against a 1-month daily average of 76.54 lakh.
- Exclusive Mondelez deal in Zimbabwe Sep 24
Varun Beverages (Zimbabwe) signed an exclusive deal to distribute Mondelez confectionery from October 1, 2026, using its existing network. This adds a new revenue stream beyond beverages in an existing market.
- Five-session winning streak Sep 22
The stock rose 1.45% to ₹431.15 for a fifth straight gain while the NIFTY fell 0.29% to 23,345.95. Its 1-year decline of 5.97% is smaller than the NIFTY's 7.25% and the Nifty FMCG index's 17.33%.
- BOLT UP, XTREME FIZZ Kenya launch Sep 14
VBL launched the BOLT UP energy drink and XTREME FIZZ carbonated soft drink in Kenya, aimed at young consumers. The launches add to its African footprint and local distribution.
- Alcobrew acquisition talks, ₹2,000-2,500 cr Sep 10
Kiva Spirits, a subsidiary incorporated August 29, is reportedly in advanced talks to buy Alcobrew at an enterprise value of ₹2,000-2,500 crore. That is 16.7-20.9x FY25 EBITDA of ₹119.7 crore, for a business with FY25 revenue of ₹1,615 crore and PAT of ₹69.45 crore. The deal would give VBL quick scale in alcobev, but it also brings diversification and valuation risk.
- Busy investor meeting schedule Sep 18
Management is meeting investors at the Jefferies India Forum (Sep 16), in Hong Kong (Sep 21-23) and at the J.P. Morgan India Consumption Forum in Gurugram (Sep 25). Participants include Raj Gandhi, Deepak Dabas and Manjit Singh.
TL;DR: VBL is outperforming the NIFTY and Nifty FMCG and has risen for five straight sessions, helped by expansion in Africa (Kenya launches, the Mondelez Zimbabwe deal). The risks are a premium PE of 48.81, weak volume behind the rally, the COO's exit and the planned ₹2,000-2,500 crore move into alcobev through Alcobrew, which carries execution and capital-allocation risk. The near-term trend is improving. The next triggers to watch are the final terms of the Alcobrew deal and management's comments at the Sep 25 J.P. Morgan forum.
Quarterly Results
| Particulars | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 5,611 | 3,871 | 2,668 | 4,317 | 7,197 | 4,805 | 3,689 | 5,567 | 7,017 | 4,897 | 4,204 | 6,574 | 8,451 |
| Expenses | 4,101 | 2,989 | 2,249 | 3,329 | 5,206 | 3,654 | 3,110 | 4,304 | 5,020 | 3,751 | 3,568 | 5,049 | 6,112 |
| Operating Profit | 1,511 | 882 | 418 | 989 | 1,991 | 1,151 | 579 | 1,263 | 1,998 | 1,146 | 637 | 1,525 | 2,339 |
| OPM % | 27% | 23% | 16% | 23% | 28% | 24% | 16% | 23% | 28% | 23% | 15% | 23% | 28% |
| Other Income | 42 | 19 | 9 | 8 | 44 | 24 | 45 | 28 | 77 | 148 | 99 | 44 | 104 |
| Interest | 69 | 62 | 74 | 94 | 129 | 119 | 109 | 41 | 37 | 45 | 47 | 49 | 57 |
| Depreciation | 172 | 171 | 166 | 188 | 242 | 257 | 261 | 273 | 306 | 308 | 330 | 357 | 409 |
| PBT | 1,311 | 667 | 188 | 716 | 1,663 | 800 | 254 | 978 | 1,732 | 941 | 359 | 1,163 | 1,977 |
| Tax % | 23% | 23% | 24% | 23% | 24% | 21% | 23% | 25% | 23% | 21% | 28% | 24% | 23% |
| Net Profit | 1,005 | 514 | 144 | 548 | 1,262 | 629 | 196 | 731 | 1,325 | 745 | 260 | 879 | 1,525 |
| EPS in Rs | 3.06 | 1.54 | 0.41 | 1.65 | 3.86 | 1.91 | 0.55 | 2.15 | 3.89 | 2.19 | 0.74 | 2.58 | 4.5 |
Profit & Loss
| Particulars | Dec 2014 | Dec 2015 | Dec 2016 | Dec 2017 | Dec 2018 | Dec 2019 | Dec 2020 | Dec 2021 | Dec 2022 | Dec 2023 | Dec 2024 | Dec 2025 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 2,502 | 3,394 | 3,861 | 4,004 | 5,105 | 7,130 | 6,450 | 8,823 | 13,173 | 16,043 | 20,008 | 21,685 | 24,126 |
| Expenses | 2,116 | 2,752 | 3,052 | 3,165 | 4,069 | 5,667 | 5,235 | 7,129 | 10,310 | 12,326 | 15,189 | 16,616 | 18,480 |
| Operating Profit | 387 | 642 | 810 | 838 | 1,036 | 1,462 | 1,215 | 1,694 | 2,863 | 3,717 | 4,818 | 5,070 | 5,646 |
| OPM % | 15% | 19% | 21% | 21% | 20% | 21% | 19% | 19% | 22% | 23% | 24% | 23% | 23% |
| Other Income | 14 | 36 | 27 | 14 | 6 | 47 | -30 | 51 | -18 | -5 | 45 | 352 | 395 |
| Interest | 187 | 170 | 435 | 215 | 223 | 324 | 294 | 207 | 204 | 292 | 483 | 196 | 197 |
| Depreciation | 210 | 317 | 322 | 347 | 385 | 489 | 529 | 531 | 617 | 681 | 947 | 1,216 | 1,404 |
| PBT | 4 | 191 | 79 | 291 | 434 | 696 | 363 | 1,007 | 2,024 | 2,739 | 3,433 | 4,010 | 4,440 |
| Tax % | 658% | 41% | 39% | 26% | 31% | 32% | 1% | 26% | 23% | 23% | 23% | 24% | — |
| Net Profit | -20 | 113 | 48 | 214 | 300 | 472 | 357 | 746 | 1,550 | 2,102 | 2,634 | 3,062 | 3,409 |
| EPS in Rs | -0.09 | 0.5 | 0.14 | 0.68 | 0.95 | 1.44 | 1.01 | 2.14 | 4.61 | 6.33 | 7.67 | 8.98 | 10.01 |
| Div. Payout % | 0% | 0% | 0% | 22% | 16% | 15% | 22% | 16% | 15% | 16% | 13% | 17% | — |
Balance Sheet
| Particulars | Dec 2014 | Dec 2015 | Dec 2016 | Dec 2017 | Dec 2018 | Dec 2019 | Dec 2020 | Dec 2021 | Dec 2022 | Dec 2023 | Dec 2024 | Dec 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 134 | 134 | 182 | 183 | 183 | 289 | 289 | 433 | 650 | 650 | 676 | 676 |
| Reserves | 9 | 91 | 1,511 | 1,587 | 1,816 | 3,040 | 3,235 | 3,647 | 4,453 | 6,287 | 15,934 | 18,902 |
| Borrowings | 2,615 | 2,527 | 2,215 | 2,654 | 2,808 | 3,417 | 3,216 | 3,387 | 3,884 | 5,431 | 2,826 | 2,508 |
| Other Liabilities | 533 | 1,680 | 915 | 852 | 1,192 | 1,630 | 1,707 | 2,113 | 2,632 | 2,819 | 3,688 | 3,454 |
| Total Liabilities | 3,292 | 4,431 | 4,824 | 5,276 | 5,998 | 8,376 | 8,447 | 9,579 | 11,618 | 15,187 | 23,124 | 25,541 |
| Fixed Assets | 2,355 | 3,496 | 3,716 | 3,981 | 4,387 | 6,479 | 6,409 | 6,311 | 6,932 | 8,409 | 13,402 | 16,759 |
| CWIP | 25 | 38 | 96 | 145 | 352 | 64 | 67 | 497 | 607 | 1,922 | 1,167 | 271 |
| Investments | 304 | 3 | 7 | 8 | 11 | 0 | 0 | 0 | 0 | 21 | 60 | 174 |
| Other Assets | 608 | 894 | 1,006 | 1,141 | 1,247 | 1,833 | 1,972 | 2,772 | 4,079 | 4,835 | 8,496 | 8,337 |
| Total Assets | 3,292 | 4,431 | 4,824 | 5,276 | 5,998 | 8,376 | 8,447 | 9,579 | 11,618 | 15,187 | 23,124 | 25,541 |
Cash Flow
| Particulars | Dec 2014 | Dec 2015 | Dec 2016 | Dec 2017 | Dec 2018 | Dec 2019 | Dec 2020 | Dec 2021 | Dec 2022 | Dec 2023 | Dec 2024 | Dec 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | 431 | 555 | 826 | 620 | 1,000 | 1,308 | 1,012 | 1,231 | 1,790 | 2,391 | 3,381 | 3,509 |
| Investing | -500 | -300 | -1,048 | -746 | -937 | -2,320 | -472 | -1,008 | -1,769 | -3,288 | -4,311 | -2,725 |
| Financing | 58 | -236 | 230 | 159 | -84 | 1,107 | -574 | -178 | -18 | 985 | 2,954 | -1,266 |
| Net Cash Flow | -11 | 19 | 8 | 32 | -22 | 95 | -33 | 46 | 4 | 88 | 2,024 | -482 |
| Free Cash Flow | 211 | 290 | 45 | 103 | 191 | 575 | 476 | 416 | 40 | -803 | -359 | 797 |
| CFO/OP | 114 | 94 | 109 | 81 | 104 | 98 | 90 | 80 | 76 | 82 | 85 | 87 |
Ratios
| Particulars | Dec 2014 | Dec 2015 | Dec 2016 | Dec 2017 | Dec 2018 | Dec 2019 | Dec 2020 | Dec 2021 | Dec 2022 | Dec 2023 | Dec 2024 | Dec 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 14 | 11 | 12 | 14 | 9 | 9 | 14 | 9 | 8 | 8 | 15 | 21 |
| Inventory Days | 77 | 90 | 103 | 88 | 94 | 100 | 123 | 131 | 116 | 106 | 114 | 111 |
| Days Payable | 48 | 39 | 58 | 38 | 52 | 54 | 68 | 64 | 48 | 37 | 64 | 53 |
| Cash Conversion Cycle | 43 | 62 | 58 | 64 | 52 | 55 | 69 | 76 | 76 | 77 | 66 | 79 |
| Working Capital Days | -99 | -73 | -89 | -65 | -50 | -37 | -47 | -34 | -24 | -9 | 16 | 31 |
| ROCE % | 7% | 12% | 16% | 12% | 15% | 18% | 11% | 17% | 27% | 29% | 25% | 20% |
Insights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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67 extracted metrics + investor summaries across FY02–FY27.
Documents
Frequently Asked Questions about Varun Beverages
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Company Information
Varun Beverages Ltd has been associated with PepsiCo since the 1990s and is a key player in beverage industry and one of the largest franchisee of PepsiCo in the world. The company produces and distributes a wide range of carbonated soft drinks, non-carbonated drinks and packaged water sold under trademarks owned by PepsiCo. PepsiCo brands produced and sold by the company include Pepsi, Seven-up, Mirinda Orange, Mountain Dew, Tropicana Juices and many more. [1]
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