NOT FOR DISTRIBUTION
Header cover image

Market Cap

₹285.6b

Last Updated

2021/04/19 12:11 UTC

Data Sources

Company Financials +

Executive Summary

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. More Details


Snowflake Analysis

High growth potential with questionable track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 540180 is less volatile than 75% of Indian stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: 540180's weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

-5.3%

540180

-1.9%

IN Beverage

-2.2%

IN Market


1 Year Return

44.1%

540180

21.4%

IN Beverage

71.1%

IN Market

Return vs Industry: 540180 exceeded the Indian Beverage industry which returned 21.4% over the past year.

Return vs Market: 540180 underperformed the Indian Market which returned 71.1% over the past year.


Shareholder returns

540180IndustryMarket
7 Day-5.3%-1.9%-2.2%
30 Day-3.9%-3.8%0.4%
90 Day6.8%-7.8%7.1%
1 Year44.6%44.1%21.6%21.4%73.7%71.1%
3 Year120.9%118.6%2.9%2.5%28.0%20.4%
5 Yearn/a28.6%28.1%87.2%71.5%

Long-Term 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?

82.13x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 540180 (₹936) is trading above our estimate of fair value (₹532.63)

Significantly Below Fair Value: 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 (82.1x) compared to the IN Beverage industry average (30.5x).

PE vs Market: 540180 is poor value based on its PE Ratio (82.1x) compared to the Indian market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: 540180 is poor value based on its PEG Ratio (2.2x)


Price to Book Ratio

PB vs Industry: 540180 is overvalued based on its PB Ratio (7.7x) compared to the IN Beverage industry average (1.8x).


Future Growth

How is Varun Beverages forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

38.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 540180's forecast earnings growth (38.1% per year) is above the savings rate (7%).

Earnings vs Market: 540180's earnings (38.1% per year) are forecast to grow faster than the Indian market (23.8% per year).

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

Revenue vs Market: 540180's revenue (14.2% per year) is forecast to grow faster than the Indian market (14% per year).

High Growth Revenue: 540180's revenue (14.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 540180's Return on Equity is forecast to be high in 3 years time (22.8%)


Past Performance

How has Varun Beverages performed over the past 5 years?

25.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 540180 has high quality earnings.

Growing Profit Margin: 540180's current net profit margins (5.1%) are lower than last year (6.6%).


Past Earnings Growth Analysis

Earnings Trend: 540180's earnings have grown significantly by 25.9% per year over the past 5 years.

Accelerating Growth: 540180's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 540180 had negative earnings growth (-29.9%) over the past year, making it difficult to compare to the Beverage industry average (-15.2%).


Return on Equity

High ROE: 540180's Return on Equity (10%) is considered low.


Financial Health

How is Varun Beverages's financial position?


Financial Position Analysis

Short Term Liabilities: 540180's short term assets (₹18.0B) do not cover its short term liabilities (₹24.3B).

Long Term Liabilities: 540180's short term assets (₹18.0B) do not cover its long term liabilities (₹24.3B).


Debt to Equity History and Analysis

Debt Level: 540180's debt to equity ratio (89.3%) is considered high.

Reducing Debt: 540180's debt to equity ratio has reduced from 306.7% to 89.3% over the past 5 years.

Debt Coverage: 540180's debt is well covered by operating cash flow (31.6%).

Interest Coverage: 540180's interest payments on its debt are not well covered by EBIT (2.6x coverage).


Balance Sheet


Dividend

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

0.27%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 540180's dividend (0.27%) isn’t notable compared to the bottom 25% of dividend payers in the Indian market (0.43%).

High Dividend: 540180's dividend (0.27%) is low compared to the top 25% of dividend payers in the Indian market (1.9%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 540180 has been paying a dividend for less than 10 years.

Growing Dividend: 540180's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (21.9%), 540180's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 540180's dividends in 3 years are forecast to be well covered by earnings (16.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.1yrs

Average board tenure


CEO

Kapil Agarwal (56 yo)

no data

Tenure

₹68,340,000

Compensation

Mr. Kapil Agarwal serves as the Chief Executive Officer of Varun Beverages Limited and also has been its Director since January 1, 2012. He joined Varun Beverages Limited since April November 01, 2004. Mr....


CEO Compensation Analysis

Compensation vs Market: Kapil's total compensation ($USD917.03K) is above average for companies of similar size in the Indian market ($USD628.46K).

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


Board Members

Experienced Board: 540180's board of directors are considered experienced (5.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

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: ₹285.585b
  • 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


Biography

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 ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/04/19 12:11
End of Day Share Price2021/04/19 00:00
Earnings2020/12/31
Annual Earnings2020/12/31


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.