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INVESTMENT INSIGHTS

Check Before You Invest : Varun Beverages Ltd

BSE: 540180 NSE: VBL ISIN: INE200M01039
  |   Sector:  FMCG   |   Industry:  Consumer Food

Snapshot

Q.1 Which industry/sub-sector does Varun Beverages Ltd belong to?
Varun Beverages Ltd belongs to the FMCG sector, operating specifically within the Consumer Food segment.
Q.2 Is Varun Beverages Ltd a good quality company?
Varun Beverages Ltd is a quality company, based on a 10 year financial track record .
Q.3 Is Varun Beverages Ltd undervalued or overvalued?
Varun Beverages Ltd appears Somewhat overvalued , as its key valuation ratios are above with their past averages.
Q.4 Is Varun Beverages Ltd a good buy now?
Varun Beverages Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways . However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Varun Beverages Ltd?
Varun Beverages Ltd revenue growth is 8.4% for FY-2025. , which is below its 5 year CAGR of 27.4% , indicating slower growth.
Q.2 Gross Profit margin of Varun Beverages Ltd?
Varun Beverages Ltd Gross profit margin which is the profit after deduction of direct costs, is 22.6% for FY-2025 , which is above its 5 year median of 19.2% , indicating increasing margins.
Q.3 Operating Profit Margin of Varun Beverages Ltd?
Varun Beverages Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 23.41% for FY-2025 , which is above its 5 year median of 21.78% indicating increasing margins.
Q.4 Net Profit Margin of Varun Beverages Ltd?
Varun Beverages Ltd Net Profit Margin is 14.12% for FY-2025 , is above with its 5 year median of 11.77%, indicating increasing margins.
Q.5 Return on Asset of Varun Beverages Ltd?
Varun Beverages Ltd Return on Asset is 12.58(x), which is below its 5 year historical median of 14.63(x), indicating deteriorated asset utilization efficiency.
Q.6 Return on Equity (ROE) of Varun Beverages Ltd?
Varun Beverages Ltd Return on equity is 16.94% for FY-2025 , which is below its historical median of 33.77%, indicating the business is making worse use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of Varun Beverages Ltd?
Varun Beverages Ltd Return on capital employed is 20.73% for FY-2025 , which is above its estimated weighted average cost of capital(WACC) 11.25%, indicating value creation .
Q.8 Cash conversion cycle of Varun Beverages Ltd?
Varun Beverages Ltd Cash conversion cycle is 30 , above its historical median of 27 , indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Q.9 Debt to Equity ratio of Varun Beverages Ltd?
Varun Beverages Ltd Debt-to-Equity ratio is 0.10 , which is above with the industry average of , indicating higher debt levels in the industry.
Q.10 Debt to cash flow from operations of Varun Beverages Ltd?
Varun Beverages Ltd Debt to cash flow from operations is 0.58 , which is at a healthy level, indicating the business is able to service its debt comfortably.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Varun Beverages Ltd?
Promoters hold 59.44% of the Varun Beverages Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Varun Beverages Ltd vs industry peers?
Varun Beverages Ltd revenue CAGR is 27.44% , compared to the industry median CAGR of 9.12% , indicating faster growth and gaining its market share.

Valuation & price assessment

Q.1 Stock return of Varun Beverages Ltd over the last decade?
Over the last 9 years, the stock has delivered a CAGR of 0% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price - 37% 14.7% -20.9%
Q.3 Valuation ratios of Varun Beverages Ltd vs historical?
The current P/E is lower that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 48.18 86.00 51.80
Price to Book 7.48 8.03 2.42
Price to Sales 6.75 4.39 1.42
EV to EBITDA 26.96 25.03 14.55

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