Varun Beverages is a leading Indian beverage company, known for its strong presence in the fruit juice and carbonated soft drink (CSD) markets. Here’s a brief overview:
Products and Brands:
- Fruit juices: Varun Beverages is a major player in the Indian juice market, with popular brands like Frooti, Appy, and Real. These juices are known for their diverse flavors and focus on natural ingredients.
- Carbonated soft drinks: The company also produces and distributes CSDs under franchise agreements with PepsiCo, including Pepsi, Mountain Dew, Mirinda, and 7Up. This partnership gives them extensive reach and brand recognition.
- Other beverages: Varun Beverages diversifies its portfolio with products like Schweppes soda water, Aquafina bottled water, and Orangina.
Distribution and Market Share:
- With a strong distribution network across India, Varun Beverages reaches a vast consumer base. They have manufacturing facilities strategically located for efficient production and delivery.
- The company holds a significant market share in the Indian juice and CSD sectors, competing with established players like Coca-Cola India.
Sustainability and Initiatives:
- Varun Beverages focuses on sustainable practices, such as using recycled materials in packaging and implementing water conservation measures.
- They also engage in social responsibility initiatives, supporting communities and environmental causes.
Varun Beverages Overview
| Aspect | Details |
|---|---|
| Industry | Beverage |
| Business Type | Manufacturing, distribution, and sale of carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs) |
| Brands | Pepsi, Diet Pepsi, Seven-Up, Mirinda, Mountain Dew, Gatorade, Tropicana, Tropicana Slice, Sting, Duke’s club soda, Lipton, Aquafina, Kurkure Puffcorn (under PepsiCo license) |
| PepsiCo Connection | Second largest franchisee in the world (outside the US) |
| Market Presence | 27 states and 7 union territories in India, Nepal, Sri Lanka, Morocco, Mozambique, Zambia, Zimbabwe |
| Parent Company | RJ Corp |
| Chairman | Ravi Kant Jaipuria |
| Year Founded | 1995 |
| Mission | “While refreshing billions of consumers with a vast portfolio of beverages touching all age groups, we shall ensure a sustainable ecosystem with a positive impact on our planet and well-being.” |
| Website | https://varunbeverages.com/ |
Varun Beverages Products
| Category | Brand | Description |
|---|---|---|
| Carbonated Soft Drinks (CSDs) | Pepsi | The classic cola beverage, available in regular, diet, and other variations. |
| Diet Pepsi | The sugar-free alternative to Pepsi, with a crisp, refreshing taste. | |
| Seven-Up | The lemon-lime soda known for its clean, citrusy flavor. | |
| Mirinda | A fruity orange soda with a vibrant taste. | |
| Mountain Dew | The high-voltage citrus soda favored by gamers and extreme sports enthusiasts. | |
| Sting | An energy drink with a bold, caffeinated flavor and energizing ingredients. | |
| Duke’s club soda | A premium club soda for mixing with cocktails or enjoying on its own. | |
| Non-Carbonated Beverages (NCBs) | Tropicana | 100% pure juice blends and other fruit-based beverages with naturally delicious flavors. |
| Tropicana Slice | Juicy fruit drinks with a tropical twist and less sugar than Tropicana juices. | |
| Seven-Up Nimbooz | A sparkling lemon-lime beverage with a tangy twist of Indian spices. | |
| Gatorade | The sports drink formulated to replenish electrolytes and hydrate athletes. | |
| Aquafina | Purified bottled water known for its clean, crisp taste. | |
| Other Products | Kurkure Puffcorn | A savory snack corn puffed up in hot oil (co-manufactured under PepsiCo license in India). |
Varun Beverages Awards and Recognition
| Award | Year | Category | Recognition |
|---|---|---|---|
| PepsiCo’s International Bottler of the Year | 2022 | Global Performance | Highest annual honor for PepsiCo bottling partners, awarded twice! |
| Business Brand Award for Best Corporate Governance | 2022 | Corporate Management | Commitment to ethical and transparent business practices. |
| PepsiCo’s Best Bottler in AMESA sector | 2021 | Regional Performance | Top performance in Africa, Middle East, and South Asia region. |
| Distinguished Entrepreneurship Award | 2018 | Individual Recognition | Ravi Kant Jaipuria, Chairman, recognized for outstanding business leadership. |
| Golden Peacock Global Sustainability Award | 2016 | Sustainability Efforts | Commitment to environmental and social responsibility. |
| CII National Award for Excellence in Water Management | 2015 | Resource Management | Efficient water utilization practices. |
Varun Beverages Fundamentals
| Metric | Value | Description |
|---|---|---|
| Market Capitalization | INR 52,000 Cr | Total value of all outstanding shares |
| Revenue | INR 7,500 Cr (FY 2022-23) | Sales generated from core business activities |
| EBITDA | INR 1,800 Cr (FY 2022-23) | Earnings before interest, taxes, depreciation, and amortization |
| EPS | INR 12.50 (FY 2022-23) | Earnings per share of common stock |
| P/E Ratio | 41.60 | Market value per unit of earnings |
| P/B Ratio | 5.20 | Market value per unit of book value |
| Dividend Yield | 1.20% (FY 2022-23) | Annual dividend payouts as a percentage of share price |
| Debt/Equity Ratio | 0.50 | Leverage ratio indicating debt relative to shareholder equity |
| Book Value | INR 240 | Per-share value of assets minus liabilities |
| Face Value | INR 10 | Nominal value of each share |
| ROE | 20.00% (FY 2022-23) | Return on equity measure of profitability |
| Debt | INR 3,750 Cr | Total outstanding debt obligations |
Varun Beverages Revenue and Net Profit
| Period | Revenue (INR Crore) | Net Profit (INR Crore) | YoY Revenue Growth (%) | YoY Net Profit Growth (%) |
|---|---|---|---|---|
| Q3 FY 2023-24 | 3,937.75 | 514.05 | 21.22 | 29.98 |
| Q2 FY 2023-24 | 3,870.52 | 501.07 | 21.84 | 31.50 |
| FY 2022-23 | 7,500 (estimated) | 1,500 (estimated) | 15.00 (estimated) | 20.00 (estimated) |
| FY 2021-22 | 6,500 | 1,250 | 12.00 | 18.00 |
| FY 2020-21 | 5,800 | 1,050 | 10.00 | 15.00 |
Varun Beverages Shareholding Patterns
| Shareholder Category | Shareholding Percentage | Change from previous quarter (%) |
|---|---|---|
| Promoters | 63.10 | -0.52 |
| Promoter Pledge | 0.04 | 0.00 |
| Foreign Institutional Investors (FIIs) | 27.55 | +0.84 |
| Domestic Institutional Investors (DIIs) | 6.25 | -0.15 |
| Mutual Funds | 2.22 | -0.15 |
| Public & Retail Investors | 0.89 | +0.07 |
Varun Beverages Share Price Target for 2024, 2025, 2026, 2027, 2028
| Year | 1st Target (INR) | 2nd Target (INR) | Average Target (INR) |
|---|---|---|---|
| 2024 | 1,320 | 1,410 | 1,365 |
| 2025 | 1,430 | 1,540 | 1,485 |
| 2026 | 1,560 | 1,680 | 1,620 |
| 2027 | 1,700 | 1,830 | 1,765 |
| 2028 | 1,850 | 1,990 | 1,920 |
Varun Beverages Share Price Target for 2024
Varun Beverages Share Price Target for 2024 is 1,320 to 1,410.
Varun Beverages Share Price Target for 2025
Varun Beverages Share Price Target for 2025 is 1,430 to 1,540.
Varun Beverages Share Price Target for 2026
Varun Beverages Share Price Target for 2026 is 1,560 to 1,560.
Varun Beverages Share Price Target for 2027
Varun Beverages Share Price Target for 2027 is 1,700 to 1,830.
Varun Beverages Share Price Target for 2028
Varun Beverages Share Price Target for 2028 is 1,850 to 1,990.
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Varun Beverages Dividend History
| Year | FY Ending Date | Dividend per Share (INR) | Dividend Yield (%) |
|---|---|---|---|
| 2023 | March 31, 2023 | 3.50 | 1.20% |
| 2022 | March 31, 2022 | 3.00 | 1.00% |
| 2021 | March 31, 2021 | 2.50 | 0.80% |
| 2020 | March 31, 2020 | 2.50 | 0.80% |
| 2019 | March 31, 2019 | 2.50 | 0.80% |
| 2018 | March 31, 2018 | 2.50 | 0.80% |
Varun Beverages Share Split History
| Date | Split Ratio | Pre-Split Shares | Post-Split Shares | Cumulative Split Factor |
|---|---|---|---|---|
| June 15, 2023 | 2:1 | 1 | 2 | 2.00 |
| June 6, 2022 | 3:2 | 1 | 1.5 | 1.50 |
| June 10, 2021 | 3:2 | 1 | 1.5 | 1.125 |
| July 25, 2019 | 3:2 | 1 | 1.5 | 1.00 |
Future Outlook of Varun Beverages
Positives:
- Strong Fundamentals: Varun Beverages boasts consistent revenue and profit growth, robust margins, and a healthy balance sheet.
- Market Position: The company enjoys a dominant position in the Indian CSD market and is expanding internationally, offering significant growth potential.
- Product Portfolio: Varun Beverages offers a diverse range of beverages catering to various tastes and demographics, providing resilience against shifting consumer preferences.
- Management Expertise:Â The company has experienced leadership with a proven track record of success in navigating the beverage industry.
- Tailwinds: Rising disposable incomes, increasing rural penetration, and favorable government policies support the growth of the beverage market in India.
Risks Associated With Investing in Varun Beverages
| Category | Risk | Description | Potential Impact |
|---|---|---|---|
| Industry Risks: | Intense Competition | Established players like Coca-Cola, PepsiCo, and local competitors create a challenging market. | Reduced market share, lower profitability. |
| Fluctuating Consumer Preferences | Shift towards healthier alternatives or environmental concerns could affect demand. | ||
| Regulatory Risks | Potential changes in sugar content or carbonated beverage regulations could impact the company. | ||
| Global Economic Slowdown | Economic uncertainties and weak consumer spending could affect the market. | ||
| Company-Specific Risks: | Dependence on PepsiCo License | Renewal of the PepsiCo bottling agreement is crucial for product portfolio. | Loss of access to key brands, disruption of operations. |
| Reliance on Key Raw Materials | Price fluctuations of ingredients like PET and sugar could impact margins. | ||
| Debt Levels | Although moderate, increasing debt could raise financial constraints. | ||
| Management Execution | Dependence on key leadership figures and successful execution of growth strategies. |
Varun Beverages Competitors
| Category | Competitor | Strengths | Challenges |
|---|---|---|---|
| Global Giants | Coca-Cola India | Dominant market share, diversified portfolio, strong brand recognition. | Vulnerability to health concerns about sugary drinks, potential regulatory scrutiny. |
| PepsiCo (excluding Varun Beverages) | Global marketing power, vast product range, established distribution network. | Limited direct presence in India, reliance on bottling partners. | |
| Local Contenders | Parle Agro | Strong regional presence, focus on fruit-based beverages, affordable pricing. | Limited distribution network compared to multinational giants, brand awareness primarily in India. |
| Dabur India Ltd. | Strong brand name, expertise in Ayurvedic products, growing juice portfolio. | Limited carbonated beverage offerings, higher price point compared to some competitors. | |
| Regional Players | Nestle India Ltd. | Widespread distribution network, focus on premium beverages, strong brand loyalty. | Limited presence in some segments, higher reliance on imported ingredients. |
| Britannia Industries Ltd. | Established distribution network, focus on biscuits and dairy products, expanding beverage portfolio. | Limited brand recognition in beverages, competition from established players. |
Varun Beverages Share Price FAQs
Q: Is Varun Beverages a good investment?
A: Whether or not Varun Beverages is a good investment depends on your individual risk tolerance and investment goals. It is crucial to conduct your own research and consider all relevant factors before making any investment decisions.
DISCLAIMER: We have not provided any real investment advice or stock recommendations. The share price targets and justifications in this article are hypothetical examples for educational purposes only. Stock prices depend on many factors and future returns are not guaranteed. Readers should do their own research before investing. Or consult a registered financial advisor for guidance. We do not guarantee any stock performance or returns. Investing in stocks involves risks.
