Varun Beverages
Varun Beverages
Fast Moving Consumer Goods F&OKey Fundamentals
LargecapNon Alcoholic BeveragesBeveragesTapetide Score
Data-driven rating, 0–100. How it works →
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 7.19 times its book value
- Promoter holding has decreased over last 3 years: -4.18%
Growth Rate
AI Analysis — Bull vs Bear
anthropic claude-opus-4.6 2h agoVarun Beverages Ltd, PepsiCo's largest franchisee bottler outside the US, commands a market cap of ₹1,37,203 Cr at a PE of 40.8x and PB of 7.11x. The company has delivered a 50% compounded profit CAGR over five years and 27% sales CAGR over the same period, though last-year ROE has moderated to 16% from a 5-year average of 22%, and the stock has declined 11% over the past year.
- Exceptional 5-year compounded profit growth of 50% CAGR demonstrates strong earnings scalability and operating leverage
- Robust 5-year compounded sales growth of 27% CAGR, with a 10-year median sales growth of 23.2%, indicating consistent top-line expansion
- TTM sales growth of 14% and TTM profit growth of 19% show continued momentum even on a larger base
- 10-year compounded profit CAGR of 40% reflects a long track record of sustained earnings compounding
- 3-year compounded sales growth of 18% and profit growth of 24% indicate profit growing faster than revenue, signalling margin improvement
- Market cap of ₹1,37,203 Cr provides significant scale advantages in distribution, procurement, and brand partnerships with PepsiCo
- 5-year ROE average of 22% and 10-year ROE average of 21% reflect consistently strong capital efficiency over long periods
- PE ratio of 40.8x is elevated, pricing in significant future growth and leaving limited margin of safety
- Price-to-book of 7.11x is high, meaning investors pay over 7 times book value per share
- Last-year ROE has declined to 16% from the 5-year average of 22%, a drop of 6 percentage points suggesting near-term return compression
- Promoter holding has decreased by 4.18% over the last 3 years, which may signal reduced insider confidence or dilution
- Stock has delivered a negative 1-year return of -11%, underperforming despite strong underlying profit growth
- Dividend yield of just 0.24% offers negligible income return to shareholders relative to the valuation premium
- 3-year stock CAGR of only 4% indicates the market has already repriced growth expectations downward from the 5-year CAGR of 27%
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
anthropic claude-opus-4.6 2h ago- Stock down 17% over past year Aug 25
Shares fell 3.82% to ₹421.25 on Aug 26 despite alcobev announcement, with stock down 14.34% YTD and 17.17% over the past year, significantly underperforming Nifty Next 50.
- Alcobev regulatory complexity ahead Aug 25
Kotak Research flags state-level complexity, limited distribution synergies with existing CSD network, and differing profitability across states as key challenges for the alcoholic beverages entry.
- Alcobrew acquisition at rich valuation Sep 10
Kiva Spirits in talks to acquire Alcobrew at ₹2,000-2,500 crore enterprise value, representing 16.7-20.9x FY25 EBITDA of ₹119.7 crore, while Alcobrew's revenue declined to ₹1,615 crore in FY25 from ₹1,640 crore in FY24.
- Strong Q2 CY26 revenue growth Aug 25
Consolidated revenue grew 20.7% YoY to ₹8,650.57 crore in Q2 CY2026, with PAT up 15% to ₹1,525.35 crore and volumes growing 19.8% YoY to 66.7 million cases.
- Robust Q1 FY27 and annual metrics Aug 18
Q1 FY27 revenue reached ₹8,451 crore with net profit of ₹1,530 crore; annual FY25 revenue hit ₹21,685 crore with debt-to-equity improving to 0.10 and ROCE at 19.47%.
- Strategic alcobev entry via KIVA Aug 25
Board approved KIVA Spirits subsidiary for RTD alcoholic beverages, appointed Diageo/Pernod Ricard veteran Prathmesh Mishra as CEO, expanding addressable market by ₹80,000 crore with disciplined ₹9 crore initial capital.
- International expansion accelerating Aug 25
Tunisia 75:25 JV approved with TND 9 million capital, Devyani Food Kenya dairy/juice acquisition for $32 million finalized Jul 6, and Carlsberg distribution deal targeting southern African white spaces.
- Positive free cash flow achieved Aug 25
VBL turned FCF positive in FY26 at ₹770 crore after three years of negative FCF, with India operations net debt-free holding ~₹1,225 crore in cash reserves.
- Twizza-Bevco merger completed Aug 17
Varun Beverages completed the merger of step-down subsidiary Twizza Proprietary Limited with The Beverage Company (Bevco) in South Africa; Twizza ceases to be a subsidiary.
- Investor meet at Jefferies forum Sep 9
VBL management including Raj Gandhi, Deepak Dabas, and Manjit Singh will participate in the Jefferies India Forum in Gurugram on September 16, 2026.
- Revised PepsiCo deal until 2049 Aug 25
Exclusive bottling agreement with PepsiCo extended to April 30, 2049, with the critical SPV restriction removed, enabling VBL to diversify into adjacent beverage categories.
TL;DR: Varun Beverages is delivering strong operational results with 20%+ revenue growth and healthy margins, but the stock has been a significant underperformer, down 17% over the past year. The bold strategic pivot into alcoholic beverages via KIVA Spirits and aggressive international expansion into Tunisia and Africa diversify the growth runway but introduce execution and regulatory risks. The potential Alcobrew acquisition at 17-21x EBITDA would fast-track the alcobev entry but needs to prove returns. The next 12-18 months hinge on whether alcobev market entry and international scaling can reignite investor confidence alongside continued core business momentum.
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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51 extracted metrics + investor summaries across FY14–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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