Varun Beverages Stock Outlook: Growth Potential, Expansion Plans & 42% Upside
Business and Industry Overview:
Varun Beverages Limited is an Indian multinational company that manufactures, bottles, and distributes beverages. It is the largest bottling company of PepsiCo’s beverages in the world outside the United States. The Company manufactures, distributes, and sells a wide range of carbonated soft drinks (CSDs), as well as a large selection of non-carbonated beverages (NCBs), including packaged drinking water sold under trademarks owned by PepsiCo.
Pepsi, Pepsi Black, Mountain Dew, Sting, Seven-Up, Mirinda Orange, Seven-Up Nimbooz Masala Soda, and Evervess are PepsiCo products that is produced and sold by VBL. It has been granted franchisees for various PepsiCo products across 27 States and 7 Union Territories in India (responsible for ~90% beverage sales volume of PepsiCo India). Beginning with its incorporation and early expansion, PepsiCo acquired a 26% stake in 1998. In 2004, Devyani Beverages merged with VBL, further strengthening its operations.VBL has also been granted the franchise for the territories of Nepal, Sri Lanka, Morocco, Zambia, and Zimbabwe. Currently, our operations span six countries across the Indian sub-continent and Africa, collectively serving over 1.4 billion customers.
The beverage industry is a very vast industry with various major players in the industry and Pepsi is one of the largest players with 33 % of the total market share. Varun Beverages Limited (VBL) accounts for about 90% of PepsiCo’s beverage sales in India. Revenue in the Beverages Market is projected to reach US$1,389.00m in 2025. The revenue in this industry is expected to show an annual growth rate (CAGR 2025-2029) of 11.90%, resulting in a projected market volume of US$2,178.00m by 2029.
Latest Stock News:
Varun Beverages, a company that makes and sells Pepsi drinks, planned to buy another drink company in Ghana called SBC Beverages. They agreed to pay $15.06 million (about ₹127.1 crore) for it in November 2024. They first thought they would finish buying the company by the end of February 2025. But now, they have decided to take more time and complete it by March 31, 2025. Varun Beverages is also buying another drink company in Tanzania for $154.50 million. Both companies they are buying sell Pepsi drinks. Varun Beverages (VBL) collected ₹7,500 crore in 2024 by selling shares to big investors. They are using this money mainly to pay back loans and buy other companies. On Tuesday, VBL’s share price fell by 4.70% and closed at ₹476.40.
Varun Beverages Ltd reported a 36 percent rise in consolidated net profit at ₹195.64 crore for the December quarter of 2024 driven by volume growth and improved margins. The company, which follows the calendar year as its financial year, had posted a net profit of ₹143.76 crore during the October-December period a year ago, according to a regulatory filing from VBL. Revenue from operations was higher at ₹3,817.61 crore during the fourth quarter as against ₹2,730.98 crore in the corresponding period last fiscal. The EBITDA increased by 38.7 percent to ₹579.97 crore from ₹418.29 crore.
Potentials:
Varun Beverages makes and sells Pepsi drinks. It is growing fast and making more money. The company is buying two other drink companies—one in Ghana for $15.06 million and one in Tanzania for $154.50 million. It first planned to finish the Ghana deal by February 2025, but now it will take until March 31, 2025. To help pay for these deals and clear some loans, Varun Beverages collected ₹7,500 crore in 2024 by selling shares to big investors. Even though the company is growing, its share price went down 4.70% on Tuesday to ₹476.40. Varun Beverages is also building more factories to make and sell even more drinks. One new factory in Bihar is already working at full speed. The company is spending a lot of money to grow bigger, and the people who own most of it believe in its future.
Analyst Insights:
- Market Capitalization: ₹1,61,141 crore
- Current Price: ₹476 per share.
- 52-Week High/Low: ₹683 / ₹454
- P/E Ratio: 62.11
- Dividend Yield: 0.21%
- Return on Capital Employed (ROCE): 24.2%
- Return on Equity (ROE): 22.0%
Varun Beverages is growing fast and making more money. Its sales and profits have increased a lot in the last few years. The company has also paid off some of its loans and is using money to buy other drink companies in Ghana and Tanzania. It is also building more factories to make even more drinks. But its stock price is high compared to its value, and the owners have sold some of their shares. Right now, the company looks strong for the future, so people who want to invest for a long time can buy the stock. But those who want quick profits should wait and watch.