BSE:540180

Stock Analysis Report

Executive Summary

Varun Beverages Limited operates as the franchisee of carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs) sold under trademarks owned by PepsiCo.

Snowflake

Fundamentals

Solid track record with reasonable growth potential.

Share Price & News

How has Varun Beverages's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

3.2%

540180

4.4%

IN Beverage

3.2%

IN Market


1 Year Return

24.2%

540180

14.0%

IN Beverage

5.6%

IN Market

Return vs Industry: 540180 exceeded the Indian Beverage industry which returned 14% over the past year.

Return vs Market: 540180 exceeded the Indian Market which returned 5.6% over the past year.


Shareholder returns

540180IndustryMarket
7 Day3.2%4.4%3.2%
30 Day2.7%5.0%6.0%
90 Day4.6%3.8%2.0%
1 Year24.7%24.2%14.2%14.0%7.8%5.6%
3 Yearn/a37.1%36.7%22.6%16.3%
5 Yearn/a48.9%48.4%43.1%29.6%

Price Volatility Vs. Market

How volatile is Varun Beverages's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Varun Beverages undervalued compared to its fair value and its price relative to the market?

42.02x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: 540180 (₹641.5) is trading above our estimate of fair value (₹371.51)

Significantly Undervalued: 540180 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 540180 is poor value based on its PE Ratio (42x) compared to the Beverage industry average (14x).

PE vs Market: 540180 is poor value based on its PE Ratio (42x) compared to the Indian market (13.3x).


Price to Earnings Growth Ratio

Low PEG Ratio: 540180 is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: 540180 is overvalued based on its PB Ratio (7x) compared to the IN Beverage industry average (1.4x).


Next Steps

Future Growth

How is Varun Beverages forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

25.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 540180's forecast earnings growth (25.9% per year) is above the savings rate (7.6%).

Earnings vs Market: 540180's earnings (25.9% per year) are forecast to grow faster than the Indian market (18.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 540180's revenue (17.4% per year) is forecast to grow faster than the Indian market (11.3% per year).

High Growth Revenue: 540180's revenue (17.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: 540180's Return on Equity is forecast to be low in 3 years time (19%).


Next Steps

Past Performance

How has Varun Beverages performed over the past 5 years?

43.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 540180 has become profitable over the past 5 years, growing earnings by 43.9% per year.

Accelerating Growth: 540180's earnings growth over the past year (48.3%) exceeds its 5-year average (43.9% per year).

Earnings vs Industry: 540180 earnings growth over the past year (48.3%) exceeded the Beverage industry 15.8%.


Return on Equity

High ROE: 540180's Return on Equity (16.7%) is considered low.


Return on Assets

ROA vs Industry: 540180 has a higher Return on Assets than the Beverage industry average last year.


Return on Capital Employed

ROCE Improving: 540180 has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Varun Beverages's financial position?


Financial Position Analysis

Short Term Liabilities: 540180's short term assets (₹17.2B) do not cover its short term liabilities (₹24.6B)

Long Term Liabilities: 540180's short term assets (17.2B) do not cover its long term liabilities (35.1B)


Debt to Equity History and Analysis

Debt Level: 540180's debt to equity ratio (129.9%) is considered high

Reducing Debt: 540180's debt to equity ratio has reduced from 850.5% to 129.9% over the past 5 years.

Debt Coverage: 540180's debt is well covered by operating cash flow (38.8%).

Interest Coverage: 540180's interest payments on its debt are well covered by EBIT (4.1x coverage).


Balance Sheet

Inventory Level: 540180 has a high level of physical assets or inventory.

Debt Coverage by Assets: 540180's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

What is Varun Beverages's current dividend yield, its reliability and sustainability?

0.26%

Current Dividend Yield


Dividend Yield vs Market

company0.3%marketbottom25%0.6%markettop25%2.4%industryaverage0.2%forecastin3Years0.5%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: 540180's dividend (0.26%) isn’t notable compared to the bottom 25% of dividend payers in the Indian market (0.59%).

High Dividend: 540180's dividend (0.26%) is low compared to the top 25% of dividend payers in the Indian market (2.43%).

Stable Dividend: 540180 is not paying a notable dividend for the Indian market, therefore no need to check if payments are stable.

Growing Dividend: 540180 is not paying a notable dividend for the Indian market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: 540180 is not paying a notable dividend for the Indian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 540180's dividend in 3 years as they are not forecast to pay a notable one for the Indian market.


Next Steps

Management

What is the CEO of Varun Beverages's salary, the management and board of directors tenure and is there insider trading?

1.7yrs

Average board tenure


CEO

Kapil Agarwal (55yo)

0yrs

Tenure

₹47,510,000

Compensation

Mr. Kapil Agarwal serves as the Chief Executive Officer of Varun Beverages Limited and also has been its Whole-time Director since 2012. He joined Varun Beverages Limited since April November 01, 2004. Mr. ...


CEO Compensation Analysis

Compensation vs. Market: Insufficient data to establish whether Kapil's total compensation is reasonable compared to companies of similar size in the Indian market.

Compensation vs Earnings: Kapil's compensation has been consistent with company performance over the past year.


Board Age and Tenure

1.7yrs

Average Tenure

59yo

Average Age

Experienced Board: 540180's board of directors are not considered experienced ( 1.7 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: 540180 insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Sell₹819,081,56725 Sep 19
Ravi Jaipuria
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares1,300,000
Max Price₹630.06
Sell₹1,701,022,47125 Sep 19
Jaipuria Group
EntityCompany
Shares2,700,000
Max Price₹630.01
Buy₹1,869,90904 Apr 19
Vikas Bhatia
EntityIndividual
Shares3,081
Max Price₹620.76
Buy₹2,028,28222 Mar 19
Vikas Bhatia
EntityIndividual
Shares3,750
Max Price₹543.57
Buy₹2,440,14322 Mar 19
Vikas Bhatia
EntityIndividual
Shares4,500
Max Price₹549.15
Buy₹1,504,94520 Dec 18
Avni Gupta
EntityIndividual
Shares3,000
Max Price₹521.96
Buy₹1,436,90020 Dec 18
Vivek Gupta
EntityIndividual
Role
Other Key Executive
Executive Director
Shares3,000
Max Price₹478.97
Buy₹2,914,87920 Dec 18
Ragini Gupta
EntityIndividual
Shares6,000
Max Price₹510.43
Buy₹2,910,97720 Dec 18
Shalini Gupta
EntityIndividual
Shares6,000
Max Price₹512.96

Ownership Breakdown


Management Team

  • Ravi Batra (47yo)

    Chief Risk Officer

    • Tenure: 0yrs
    • Compensation: ₹7.46m
  • Sugato Palit (47yo)

    Chief Human Resources Officer

    • Tenure: 0yrs
  • Varun Ravi Jaipuria (31yo)

    Whole-Time Director

    • Tenure: 0yrs
    • Compensation: ₹31.26m
  • Raj Gandhi (62yo)

    Whole-Time Director

    • Tenure: 0yrs
    • Compensation: ₹48.72m
  • Kapil Agarwal (55yo)

    CEO & Whole-Time Director

    • Tenure: 0yrs
    • Compensation: ₹47.51m
  • Kamal Karnatak (46yo)

    Senior Vice President of Information Technology

    • Tenure: 0yrs
  • Rajinder Jeet Bagga (56yo)

    COO & Whole-Time Director

    • Tenure: 0.4yrs
  • Sudin Kumar Gaunker (47yo)

    Chief Operating Officer

    • Tenure: 0yrs
  • Vivek Gupta (55yo)

    Executive Director

    • Tenure: 0yrs
  • Bhupender Singh (54yo)

    Senior Vice President

    • Tenure: 0yrs

Board Members

  • Naresh Trehan (73yo)

    Non-Executive & Independent Director

    • Tenure: 3.8yrs
  • Ravi Jaipuria (64yo)

    Non-Executive Chairman

    • Tenure: 0yrs
  • Varun Ravi Jaipuria (31yo)

    Whole-Time Director

    • Tenure: 0yrs
    • Compensation: ₹31.26m
  • Raj Gandhi (62yo)

    Whole-Time Director

    • Tenure: 0yrs
    • Compensation: ₹48.72m
  • Kapil Agarwal (55yo)

    CEO & Whole-Time Director

    • Tenure: 0yrs
    • Compensation: ₹47.51m
  • Pradeep Sardana (69yo)

    Non-Executive & Independent Director

    • Tenure: 3.6yrs
    • Compensation: ₹300.00k
  • Rajinder Jeet Bagga (56yo)

    COO & Whole-Time Director

    • Tenure: 0.4yrs
  • Sita Khosla (55yo)

    Non-Executive Independent Director

    • Tenure: 1.7yrs
    • Compensation: ₹300.00k
  • Rashmi Dhariwal

    Non-Executive Independent Director

    • Tenure: 1.6yrs
    • Compensation: ₹800.00k
  • Ravi Gupta

    Non-Executive Independent Director

    • Tenure: 1.6yrs
    • Compensation: ₹700.00k

Company Information

Varun Beverages Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Varun Beverages Limited
  • Ticker: 540180
  • Exchange: BSE
  • Founded: 1995
  • Industry: Soft Drinks
  • Sector: Food, Beverage & Tobacco
  • Market Cap: ₹180.849b
  • Shares outstanding: 288.69m
  • Website: https://www.varunpepsi.com

Number of Employees


Location

  • Varun Beverages Limited
  • RJ Corp House
  • Plot No. 31
  • Gurugram
  • Haryana
  • 122002
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
VBLNSEI (National Stock Exchange of India)YesEquity SharesININRNov 2016
540180BSE (Mumbai Stock Exchange)YesEquity SharesININRNov 2016

Biography

Varun Beverages Limited operates as the franchisee of carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs) sold under trademarks owned by PepsiCo. The company produces, bottles, and distribute ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/18 12:51
End of Day Share Price2019/10/18 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.