VBL formerly known as a Varun Beverages Limited create a histoy, shares hits all time high Rs 1075 after listing. VBL a hidden gem of Indian stock market but some people ignore this stock. Being one of the biggest PepsiCo franchisees worldwide and a major participant in the beverage business, Varun Beverages Ltd. has been connected to the company since the 1990s. Under PepsiCo owned trademarks, the corporation manufactures and sells a broad variety of carbonated soft drinks, non-carbonated beverages, and bottled water.
Key Factor Behind Varun Beverages Limited Massive Growths
VBL Journey Start: Mr. Ravi Jaipuria, a creative businessman with a drive to create prosperous companies, created VBL India Ltd. in 1995. The business began by producing and distributing PepsiCo’s well-known drinks as a franchisee for the firm in northern India. As it grew in size and range of products over time, Varun Beverages Limited India became one of PepsiCo’s biggest franchisees worldwide.
Modern production facilities with the newest technology were established by the firm as a result of its dedication to efficiency and quality. This commitment to quality has improved Varun Beverages Limited India’s relationship with PepsiCo and enabled it to expand its product line to include a large selection of both carbonated and non-carbonated beverages.
1> VBL global presence and strong Partnerships: The success of VBL India beyond the boundaries of the Indian subcontinent. As a result of its deliberate expansion of its operations cover six countries: three in the Indian Subcontinent (India, Sri Lanka, Nepal), which contributed for 85% of total income; three in Africa (Morocco, Zambia, Zimbabwe), which contributed for 15% of total revenue. the firm has emerged as a major player on the worldwide beverage industry. By means of a blend of tactical procurements and collaborations, Varun Beverages Limited India has created a foothold in several areas, meeting the changing demands of global customers.
An important step was taken in 2018 when Varun Beverages Limited India bought the franchise rights for PepsiCo goods in Southeast Asian countries. The company’s geographical reach was increased by this calculated growth, which also helped to establish it as a major participant in the global beverage industry.
2> Strong supply chain: VBL strong and well established distribution network serves a wide spectrum of customer demands in urban, semi-urban, and rural areas. The company has six overseas locations in addition to 37 cutting edge production facilities in India. With more than 112 owned depots, 2,500 owned cars, 2,400 major distributors, it has a strong supply chain. In the last 12 months, VBL has taken on 500,000 new outlets, bringing its overall outlet reach to 3.5 million stores.
3> Strong market value: VBL a large cap company India’s largest top player in beverage industry.
| Market Cap | 1,38,776 Crore |
| Stock P/E | 69.4 |
| ROCE | 27.4% |
| Return on Equity | 33.5% |
| PEG Ratio | 1.41 |
| Face Value | 5 |
| Debt to Equity | 0.57 |
| EVEBITDA | 39.9 |
| EPS | Rs 15.4 |
| Sales Growth | 22.9% |
| Profit Growth | 38.9% |
| Dividend Yield | 0.12% |
| Pledged Percentage | 0.04% |
4> Financial Performance: VBL sales , profit continuously growing, sales grows around 23% CAGR and profit growing by 39% CAGR. Beacuse of milder summer, Varun Beverages Limited underperformed during the crucial April June quarter. However, from July to September, VBL had a 22% YoY increase in top line at Rs 3,870 crore, supported by a 16% increase in volumes, and a 31.3 % increase in Profit after tax at Rs 503 crore. VBL is a consistent compounders company.
All price are Rs Crores:
| Particulars | Dec 2021 | Dec 2022 | TTM |
|---|---|---|---|
| Operating Profit | 1,695 | 2,863 | 3,498 |
| Borrowings | 3,387 | 3,884 | 3,727 |
| Reserves | 3,646 | 4,454 | 5,840 |
| EPS in Rs | 5.34 | 11.55 | 15.40 |
| Expenses | 7,129 | 10,310 | 12,093 |
| Sales | 8,823 | 13,174 | 15,590 |
| Total Assets | 9,579 | 11,619 | 13,420 |
| Net Profit | 746 | 1,550 | 2,042 |
5> Government Improve Infrastructure: The business of VBL was benefited by increased road connections and rural electrification. Improved road systems made it possible for it to go to far-off places at a reduced cost, and VBL was able to install its freezers in retail sites. One of the best methods to entice customers is, after all, to place iced cola bottles around the neighborhood.The rural market’s performance is poor for many FMCG companies. However, VBL’s commercial expansion is also being aided by improved infrastructure.
6> Partnership With PepsiCo: VBL is the only Indian business included among the biggest global bottlers for the massive American company PepsiCo, and for good reason. With years of consistent growth, Varun beverages limited has been able to meet the demand of Indian consumers for branded juices, colas, and bottled drinking water. In order to expand its bottling, sales, and distribution network in seven states and five union territories of India, Varun Beverages Limited completed the purchase of PepsiCo’s franchise rights in the South and West in 2019. The company’s relationship with PepsiCo has been strengthened by these purchases, which have increased its share of the beverage sales volume in India from 55% to over 80%.
VBL Popular Brands: Pepsi, 7 up, Mountain Dew, Sting energy drink, Mirinda, Slice, Tropicana, Aquafina, Gatorade, Lipton ice tea etc. Varun Beverages limited part of the Rj Group which holds the largest franchisee status in India for KFC, Pizza Hut, Cream Bell, and Costa Coffee.
7> Capacity Expansion: In order to increase capacity and increase sales, VBL has invested Rs 3,000 crore. This will enable it to increase its peak production capacity by more than 43% in 2022. The Company spent Rs. 6,300 million in greenfield growth in Bihar and Jammu, as well as brownfield expansions in India, and Rs 2,500 million in brownfield expansion in Morocco and Zimbabwe Moreover, Rs. 3,700 million would be used to buy land for upcoming capacity additions in 2024–2025.
8> FII Increase Stake: FII continuously increase holding in Varun Beverages Limited that is create a positive sentiment FII continuously increase holding in VBL that is create a positive sentiment. Here we discuss about VBL share holding pattern:
| Mar 2023 | Jun 2023 | Sep 2023 | |
|---|---|---|---|
| Promoters | 63.90% | 63.61% | 63.09% |
| FIIS | 26.00% | 26.71% | 27.55% |
| DIIS | 3.67% | 3.16% | 3.36% |
| Public | 6.41% | 6.52% | 6.01% |
Increase Credit Rating: CRISIL give AA+/Stable’ rating to VBL. Here we give a link about crisil rating, you can read full details.
Conclusion: The transformation of VBL India Ltd. from a small regional franchisee to a major international beverage company is evidence of its tenacity, inventiveness, and dedication to quality. One can only expect further milestones and accomplishments as the business keeps evolving in response to shifting market realities. The success story of Varun Beverages Limited India is a source of motivation for would-be business owners and a guide for established companies attempting to negotiate the intricacies of the contemporary business environment. With a foundation based on sustainability, innovation, and quality, VBL India Ltd is well-positioned to develop and have an impact on the global beverage sector going forward.
FAQ:
Varun Beverages Limited
Mr. Ravi Jaipuria, a creative businessman with a drive to create prosperous companies, created VBL India Ltd. in 1995.
VBL is Good Share For Investment?
Yes beacuse company finnacial statement very strong, VBL continuously focus on capacity expansion and innovation
IS VBL a Consistent Compounders?
YES, Please view company return chart
VBL sales grows 23% CAGR
VBL Profit Grows 39% CAGR.
Varun Beverages Limited Brands Name?
7up, Pepsi, Slice, Sting, Mirinda, Tropicana, Aquafina, Mountain Dew etc.
Rj Group
