Varun Beverages Limited
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.
Key Brands
- PepsiCo. franchised Brands – Pepsi, Tropicana, Slice, 8UP, Sting, Kurkure, Aquafina, Lipton, Doritos, Mirinda, Fritolay etc.
- Own Brands – Jive, Cooe, Reboost, Creambell, Aquaclear, Refreshh etc.
Shareholding Pattern
-PUBLIC GROUP
-PROMOTER GROUP
Financial Summary
| Particulars | Dec-21 | Dec-22 | Dec-23 |
| Sales | 8,823 | 13,173 | 16,043 |
| Sales Growth % | 36.79% | 49.30% | 21.78% |
| Expenses | 7,129 | 10,310 | 12,326 |
| Operating Profit | 1,694 | 2,863 | 3,717 |
| OPM % | 19% | 22% | 23% |
| Net Profit | 746 | 1,550 | 2,102 |
| EPS in Rs | 2.14 | 4.61 | 6.33 |
Synopsis of Financials
- As of Q1FY25, their operations span 10 countries with franchise rights and 4 countries with distribution rights. In FY24, 3 territories in the Indian Subcontinent (India, Sri Lanka, Nepal) contributed ~83% to revenues; 3 territories in Africa (Morocco, Zambia, Zimbabwe) contributed to ~17% of total revenues.
- Consolidation – In March,24, they consolidated the franchised territories of South Africa, Lesotho & Eswatini and the territories with distribution rights in Namibia, Botswana, Mozambique and Madagascar.
Final Outlook
1. Revenue and Profit Growth:
Revenue has grown at a CAGR of 20.7% from ₹5,228 crore in FY18 to ₹13,391 crore in FY22.
Net profit increased at a faster CAGR of 38.9%, reaching ₹1,550 crore in FY22. This growth is driven by volume increases and operating leverage
2. Margins:
EBITDA margins improved to 21.2% in FY22 (from 19.7% in FY18).
Net profit margins also improved significantly, from 5.9% in FY18 to 11.8% in FY22
3. Leverage:
Debt-to-equity ratio improved from 1.3 in FY18 to 0.7 in FY22.
Interest coverage ratio rose to 15.19 times, reflecting better financial health
Varun Beverages is suitable for those seeking long-term capital appreciation rather than immediate returns. Its growth trajectory, operational efficiency, and strategic investments position it well for sustained performance in the beverage industry.
Varun-Beverages