VBL
Varun Beverages Limited Fundamentals
Varun Beverages is the second largest franchisee within the world (outside US) of effervescent soft drinks (CSDs) and non-carbonated potables (NCBs) oversubscribed beneath logos closely-held by PepsiCo and a key player in the beverage industry. the corporate turn out and distribute a good vary of CSDs, furthermore as an oversized choice of NCBs, together with packaged drinking water. PepsiCo CSD brands sold by the company embody Pepsi, Diet Pepsi, high-low-jack, Mirinda Orange, Mirinda Lemon, Mountain Dew, Seven-Up Nimbooz Masala Soda, Evervess Soda, Duke’s Soda and Sting. PepsiCo NCB brands sold by the company include Tropicana (100%, necessities & Delight), Tropicana Slice, Tropicana Frutz, high-low-jack Nimbooz, Gatorade and Quaker Oat Milk furthermore as packaged potable beneath the whole Aquafina. In addition, the corporate also been granted the franchise for Ole brand of PepsiCo product in Sri Lanka.
The corporate has been related to PepsiCo since the Nineties and has over 2 and 0.5 decades consolidated its business association with PepsiCo, increasing the amount of PepsiCo commissioned territories and sub-territories lined by the company, manufacturing and distributing a wider vary of PepsiCo beverages, introducing numerous SKUs in its portfolio, and increasing its distribution network. the corporate has been granted franchisees for numerous PepsiCo product unfold across twenty seven States and seven Union Territories (except Jammu & geographical region and Andhra Pradesh) in India.
Although, India is the company’s largest market, it's conjointly been granted the franchise for various PepsiCo products for the territories of Nepal, Sri Lanka, Morocco, Republic of Zambia and Zimbabwe. VBL has many producing plants in India and in international geographies. In addition, the corporate has discovered backward integration facilities for production of preforms, crowns, furrowed boxes, plastic crates and shrink-wrap films in sure of its production facilities to make sure operational efficiencies and quality standards. the corporate is an element of the RJ firm group, a heterogeneous business conglomerate with interests in beverages, quick-service restaurants, dairy farm and healthcare.
Business area of the Company
The company is franchisee of CSDs and NCBs sold under trademarks owned by PepsiCo in India and internationally.
Products
The company’s portfolio of beverage products includes some of the best recognized PepsiCo trademarks in the world. Its product portfolio includes CSDs and NCBs.
Carbonated Soft Drinks
- Pepsi-Cola
- Seven-Up
- Mountain Dew
- Mirinda
- Evervess
Non-Carbonated Beverages
- Tropicana Slice
- Nimbooz
- Tropicana Frutz
Packaged Drinking Water
- Aquafina
Awards
- 2009: The Company received BU Best Quality Plant Team Award for the production facility at Kosi.
- 2010: The Company received PepsiCo Amea Bronze Food Safety Award for the production facility at Greater Noida I.
- 2010: The Company received ISO 14001: 2004 certificate for the production facility at Jainpur.
- 2011: The Company received PepsiCo Amea Silver Food Safety Award for the production facility at Greater Noida I.
- 2011: The Company received PepsiCo Quality Excellence Bronze Award for the production facility at Kosi.
- 2011: The Company received ISO 14001:2004 certificate for the production facility at Bhiwadi.
- 2012: The Company received PepsiCo Amea Gold Food Safety Award for the production facility at Greater Noida I.
- 2012: The Company received ISO 14001:2004 certificate for the production facility at Kolkata.
- 2013: The Company received FSSC 22000:2010 certificate for the production facility at Greater Noida I.
- 2014: The Company received OHSAS 18001:2007 certificate for the production facility at Nuh.
- 2014: The Company received ISO 14001: 2004 certificate for the production facility at Nuh.
- 2014: The Company received CII National Award for Food Safety for the production facility at Nuh.
- 2015: The company received FSSC 22000 certificate for the production facilities at Goa, Greater Noida II and Kolkata.
- 2015: The Company received ISO 14001:2004, OHSAS 18001:2007 and ISO 9001:2008 certificates for the backward integration facility at Alwar.
- 2015: The Company received ISO 22000:2005 and ISO 9001:2008 certificates for the backward integration facility at Jaipur.
- 2015: The Company received AIB International certificate for the production facilities at Bhiwadi, Goa, Jainpur, Bazpur, Greater Noida II, Kolkata, Satharia, Kosi and Greater Noida I.
- 2018: National Best Employer Brand Award for 2018, by ET Now
- 2018: North India Best Employer Brand Award for 2018
- 2018: Nepal Best Employer Brand Award for 2018
- 2019: The Company received Corporate Governance Awards 2019 - Best FMCG Corporate Governance India by Capital Finance International (Cfi.co)
- 2019: Sri Lanka Best Employer Brand Award for 2019
- 2019: Bottler of the year 2019
- 2019: Best FMCG Corporate Governance India 2019
Milestones
- 1995: Incorporation of the company as public limited company.
- 1996: Started operation at Jaipur.
- 1999: Started operations in Alwar, Jodhpur and Kosi.
- 2004: Merger of DBL with the company pursuant to the order of High Court of Delhi dated October 6, 2004.
- 2013: Merger of VBIL with the company pursuant to the order of High Court of Delhi dated March 12, 2013.
- 2013: The company acquired the business of manufacturing and marketing of soft drink beverages and syrup mix in Delhi, India.
- 2015: Business transfer agreement through which the company acquired PepsiCo India’s business of manufacturing, marketing, selling and distributing soft drink beverages and syrup mix in the Indian states of Uttar Pradesh (excluding certain territories), Uttarakhand, Himachal Pradesh, Haryana (excluding certain territories) and the Union Territory of Chandigarh.
- 2015: Business transfer agreement through which the company acquired PepsiCo India’s business of manufacturing, marketing, selling and distributing soft drink beverages and syrup mix in Bazpur, Jainpur, Satharia and Panipat.
- 2015: The company acquired the business of selling and distribution of soft drinks beverages and syrup mix in one district undertaking situated in Punjab.
- 2016: The company acquired entire shareholding of Arctic International Private Limited in Varun Beverages Mozambique, Limitada.
- 2016: The company acquired entire shareholding of Arctic International Private Limited in Varun Beverages (Zambia) Limited.
- 2016: Incorporation of Varun Beverages (Zimbabwe) (Private) Limited.
- 2016: Acquisition of 85% of the shareholding of VBZPL.
- 2017: Concluded the acquisition of PepsiCo India’s previously franchised sub-territories of the State of Odisha and parts of Madhya Pradesh along with two manufacturing units at Bargarh (Odisha) and Mandideep (MP) w.e.f. September 27, 2017.
- 2017: Launched Pepsi Black, a zero calorie cola flavor CSD product currently available in 250ml cans and 250 ml nonreturnable glass bottles.
- 2017: Launched Sting for the next season, a carbonated energydrink available in 250ml cans and 250 ml PET bottles at a highly competitive price point as compared to other brands in the segment.
- 2018: Concluded the acquisition of PepsiCo India’s previously franchised sub-territory of the State of Chhattisgarh w.e.f. January 11, 2018
- 2018: Acquired franchisee rights of PepsiCo India’s previously franchised sub-territory of the State of Bihar w.e.f. January 17, 2018
- 2018: Acquired a manufacturing unit at Cuttack (Odisha) w.e.f. Jan 19, 2018
- 2018: Concluded the acquisition of PepsiCo India’s previously franchised sub-territory of the State of Jharkhand along with a manufacturing unit at Jamshedpur.
- 2018: Consolidation of 5 new sub-territories acquired in 2018 has yielded positive results with significant volume and margin expansion.
- 2018: Expanded juice portfolio with the launch of Fizzy drink in seven different flavors, leveraging the ‘Slice’ brand with wider recognition and strong brand value.
- 2018: Invested in setting-up a manufacturing facility in Pathankot to commence in-house production.
- 2019: Concluded the acquisition of PepsiCo India’s previously franchised territories of parts of Maharashtra (14 districts), parts of Karnataka (13 districts) and parts of Madhya Pradesh (3 districts) w.e.f. February 14, 2019.
- 2019: Entered into a binding agreement with PepsiCo India Holdings Private Limited (‘PepsiCo’) on February 18, 2019 to acquire franchise rights in South and West regions, subject to statutory approvals.
- 2019: PepsiCo divests West and South bottling franchise to Varun Beverages
- 2019: Introduced three variants of ambient temperature value-added dairy beverages - Belgian Chocolate, Cold Coffee, and Mango Shake - at a price of Rs 30 for 200ml PET bottle with a long shelf life of 180 days.
- 2019: Concluded the acquisition of PepsiCo India’s previously franchised territories of parts of Maharashtra (14 districts), parts of Karnataka (13 districts), and parts of Madhya Pradesh (3 districts).
- 2019: Concluded the acquisition of franchise rights in South and West regions from PepsiCo for a national bottling, sales, and distribution footprint in 7 States and 5 Union Territories of India w.e.f. May 1, 2019.
Varun Beverages Limited Stock Price Analysis and Quick Research Report
Let’s scrutinize however VBL is acting and if it's the proper time to buy the stock of VBL with careful analysis.
PE ratio: - Price to Earnings' ratio, which indicates for every rupee of earnings how much an investor is willing to pay for a share. A general rule of thumb is that shares trading at a LOW P/E are undervalued (it depends on other factors too). Varun Beverages has a PE ratio of 89.35 which is high and comparatively overvalued .
Return on Assets (ROA): - Return on Assets measures how effectively a company can earn a return on its investment in assets. In other words, ROA shows how efficiently a company can convert the money used to purchase assets into net income or profits. Varun Beverages has ROA of 2.70 % which is a bad sign for future performance. (higher values are always desirable)
Current Ratio: - The current ratio measures a company's ability to pay its short-term liabilities with its short-term assets. A higher current ratio is desirable so that the company could be stable to unexpected bumps in business and economy. Varun Beverages has a Current ratio of 0.67 .
Return on equity: - ROE measures the ability of a firm to generate profits from its shareholders investments in the company. In other words, the return on equity ratio shows how much profit each rupee of common stockholders’ equity generates. Varun Beverages has a ROE of 5.75 % .(higher is better)
Debt to equity ratio: - It is a good metric to check out the capital structure along with its performance. Varun Beverages has a D/E ratio of 0.76 which means that the company has low proportion of debt in its capital.
Inventory turnover ratio: - Inventory Turnover ratio is an activity ratio and is a tool to evaluate the liquidity of a company's inventory. It measures how many times a company has sold and replaced its inventory during a certain period of time. Varun Beverages has an Inventory turnover ratio of 8.64 which shows that the management is inefficient in relation to its Inventory and working capital management.
Sales growth: - Varun Beverages has reported revenue growth of -13.16 % which is poor in relation to its growth and performance.
Operating Margin: - This will tell you about the operational efficiency of the company. The operating margin of Varun Beverages for the current financial year is 17.64 %.
Dividend Yield: - It tells us how much dividend we will receive in relation to the price of the stock. The current year dividend for Varun Beverages is Rs 2.50 and the yield is 0.21 %.
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