Varun Beverages Ltd. (VBL) AI Stock Analysis

• Market Cap: ₹1.59T
• Dividend Yield: 0.32%
• Average Volume (3M): 603.38K
• Price to Earnings (P/E): 54.5
• Beta (1Y): 1.09
• Revenue Growth: 16.76%
• EPS Growth: 13.96%
• Country: IN
• Employees: 11,041
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Beverages - Non-Alcoholic
• EPS (TTM): 3.90
• Shares Outstanding: 3,381,961,200
• 10 Day Avg. Volume: 655,238
• 30 Day Avg. Volume: 603,379
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ₹604.13
• Price Target Upside: 27.60% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 60 Neutral
• Price Target: ₹514.00 ▲(8.56% Upside)

Varun Beverages Ltd. has a strong financial performance with robust revenue growth and profitability, but faces challenges with high leverage and cash flow issues. The technical analysis indicates a bearish trend with weak momentum. The valuation suggests the stock is overvalued, with a high P/E ratio and low dividend yield.

Varun Beverages Ltd. Business Overview & Revenue Model

Company Description

Varun Beverages Limited, together with its subsidiaries, operates as the franchisee of carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs) sold under trademarks owned by PepsiCo. The company manufactures, bottles, distributes, and sells a range of CSDs under the Pepsi, Diet Pepsi, Seven-Up, Mirinda Orange, Mirinda Lemon, Mountain Dew, Seven-Up Nimbooz Masala Soda, Evervess Soda, Duke's Soda, Sting, Pepsi Black, Mountain Dew Ice, Slice Fizzy, and Teem brands. It also produces and distributes NCBs under the of Tropicana Slice, Tropicana Juices, Seven-Up Nimbooz, Gatorade, and Quaker Oats Milk brand names, as well as packaged drinking water under the Aquafina and Aquavess brand names. In addition, the company holds the franchise for Ole brand of PepsiCo products in Sri Lanka. It sells its products to retail outlets directly and through distributors in India, as well as territories of Nepal, Sri Lanka, Morocco, Zambia, and Zimbabwe. The company was incorporated in 1995 and is based in Gurugram, India. Varun Beverages Limited is a subsidiary of RJ Corp Limited.

How the Company Makes Money

Varun Beverages Ltd. generates revenue primarily through the sale of its beverage products. The company's key revenue streams include the distribution of carbonated soft drinks like Pepsi, Mountain Dew, and 7UP, as well as non-carbonated beverages such as Tropicana juices, Aquafina bottled water, and Gatorade. VBL's earnings are significantly supported by its exclusive franchise agreement with PepsiCo, allowing it to produce and sell PepsiCo's beverage brands in designated territories. The company has invested in extensive production facilities and an efficient distribution network to ensure product availability and market penetration, which contributes to its revenue growth. Strategic partnerships and market expansion efforts in emerging markets also play a crucial role in enhancing VBL's profitability.

Varun Beverages Ltd. Financial Statement Overview

Summary

Varun Beverages Ltd. shows strong revenue growth and profitability, with solid margins despite some operational pressures. The balance sheet reflects high leverage but strong equity growth. Cash flow challenges due to high capital investments persist, though operating cash flow remains strong.

Income Statement

Varun Beverages Ltd. has demonstrated consistent growth in revenue, with a notable increase from 2023 to 2024. The gross profit and net profit margins have shown healthy figures, indicating efficient cost management. However, the decline in EBIT margin from 2023 suggests potential pressure on operational efficiency. Overall, the income statement reflects strong financial performance with a solid upward revenue trajectory.

Balance Sheet

The balance sheet of Varun Beverages Ltd. shows a strong equity position with a growing equity ratio. However, the company has a relatively high debt-to-equity ratio, which could pose a risk if not managed properly. The return on equity is robust, reflecting effective use of shareholders' funds. Despite high leverage, the stability in equity growth is promising.

Cash Flow

The cash flow statement reveals challenges with negative free cash flow in recent years, indicating high capital expenditures. The operating cash flow remains strong, though the free cash flow to net income ratio is concerning. While the company manages to maintain positive operating cash flow, the significant capital investments are impacting free cash flow negatively.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	164.53B	204.81B	160.43B	129.21B	88.23B	64.50B
Gross Profit	83.01B	111.03B	86.38B	65.25B	25.16B	36.11B
EBITDA	39.52B	48.63B	36.87B	27.97B	17.45B	11.85B
Net Income	21.64B	25.95B	20.56B	14.97B	6.94B	3.29B
Balance Sheet
Total Assets	0.00	231.44B	151.87B	116.18B	95.82B	84.58B
Cash, Cash Equivalents and Short-Term Investments	24.50B	24.50B	4.57B	2.85B	1.51B	1.05B
Total Debt	0.00	28.26B	54.31B	38.84B	33.87B	32.41B
Total Liabilities	-167.40B	64.04B	81.03B	64.03B	53.85B	48.70B
Stockholders Equity	167.40B	166.10B	69.36B	51.02B	40.80B	35.24B
Cash Flow
Free Cash Flow	0.00	-3.98B	-8.73B	-109.63M	2.89B	4.52B
Operating Cash Flow	0.00	33.81B	23.91B	17.90B	12.31B	10.12B
Investing Cash Flow	0.00	-43.17B	-32.90B	-17.05B	-10.11B	-4.71B
Financing Cash Flow	0.00	29.54B	9.85B	-179.42M	-1.78B	-5.74B

Varun Beverages Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 473.45
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:VBL, the sentiment is Negative. The current price of 473.45 is below the 20-day moving average (MA) of 487.49, below the 50-day MA of 491.25, and below the 200-day MA of 520.83, indicating a bearish trend. The MACD of -7.86 indicates Positive momentum. The RSI at 42.55 is Neutral, neither overbought nor oversold. The STOCH value of 32.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:VBL.

Varun Beverages Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MARICO	71 Outperform	924.50B	55.26	40.98%	1.46%	16.58%	9.72%
TATACONSUM	71 Outperform	1.12T	84.41	6.39%	0.73%	14.09%	13.85%
DABUR	68 Neutral	949.72B	53.28	16.37%	1.49%	-0.03%	-5.22%
BRITANNIA	66 Neutral	1.47T	66.89	50.02%	1.23%	7.68%	0.27%
NESTLEIND	66 Neutral	2.32T	74.72	79.99%	1.00%	3.88%	-4.22%
VBL	60 Neutral	₹1.59T	54.48		0.32%	16.76%	13.96%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

Varun Beverages Ltd. Corporate Events

Varun Beverages Expands into Snack Category Amid Resilient Q2 Performance

Varun Beverages Ltd. reported a resilient financial performance for the second quarter and half-year ending June 30, 2025, despite challenges posed by early monsoon rains in India. The company maintained its EBITDA margins and realizations per case, supported by growth in international markets and favorable currency movements in Africa. Notably, the commencement of Cheetos production in Morocco marks a strategic expansion into the snack category, enhancing its product portfolio and diversifying revenue streams.