Business Analysis & Valuation Report

1
S.No. Particulars
1 Company Overview
2 Global Economy
3 Indian Economy
4 Indian Non-Alcoholic Beverages Industry
5 Analysis of Capital Expenditure and Growth Strategy
6 Financials Prepared By: Yashwant Paliwal
7 Valuation
8 DCF Valuation
9 Relative Valuation (As per Prof. Damodaran Approach)
10 Weighted Average Cost of Capital (WACC)
11 Blume - Beta Analysis 5 Year - Monthly
12 DuPont Analysis - Return on Equity & Return on Assets
13 Valuation Summary
14 Disclaimer

2
Company Overview
Product Wise Breakup
Introduction 5.0%

Varun Beverages Ltd (herein referred as VBL) was incorporated on 16th June
1995 at New Delhi as a public limited company under the Companies Act, 23.0%
1956. The company obtained a certificate of commencement of business on
4 July 1995. The company started its operations at Jaipur in 1996. In 1999,
the company started operations at Alwar, Jodhpur and Kosi. 72.0%

It is part of the RJ Corp group, a diversified business conglomerate with

interests in beverages, quick-service restaurants, dairy and healthcare, is
the second largest franchisee in the world (outside US) of carbonated soft
drinks (CSDs) and non-carbonated beverages (NCBs) sold under trademarks
owned by PepsiCo. The company produces and distributes a wide range of Juice-Based Drinks Packed Drinking Water Carbonated Soft Drinks(CDS)

CSDs, as well as a large selection of NCBs, including packaged drinking

water.

Business Presence
Share Price Performance
The Company has presence in 27 States and 7 Union Territories in India and
5 other countries across the world viz. Nepal, Sri Lanka, Morocco, Zambia & 1,600
1,500
Zimbabwe. Further, It is having 37 manufacturing facilities, of which 31 are
1,400
in India and 6 in International Geographies with more than 2,500 owned
1,300
vehicles, more than 2,000 primary distributors and more than 100 depots.
1,200
1,100
Key Products/Brands 1,000
900
PepsiCo CSD brands produced and sold by the company include Pepsi, Diet 800
Pepsi, Seven-Up, Mirinda Orange, Mirinda Lemon, Mountain Dew, Seven-Up 700
Nimbooz Masala Soda, Evervess Soda, Sting and Gatorade. PepsiCo NCB Aug-2023
Aug-2023
Jul-2023
Jul-2023
May-2023

May-2024
Jun-2023
Jun-2023
May-2023

May-2024
Mar-2024
Mar-2024
Nov-2023
Nov-2023
Aug-2023

Dec-2023
Dec-2023
Dec-2023
Sep-2023
Sep-2023

Feb-2024
Feb-2024

Apr-2024
Apr-2024
Oct-2023
Oct-2023

Jan-2024
Jan-2024
brands produced and sold by the company include Tropicana (100%,
Essentials & Delight), Tropicana Slice, Tropicana Fruitz, Seven-Up Nimbooz
and brand Aquafina.
3
Global Economy Global GDP Projections (%)
Overview 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%

3.10%
The global economy continues to recover slowly from the blows of the World
pandemic, Russia’s invasion of Ukraine, and the cost-of-living crisis. In
retrospect, the resilience has been remarkable. Despite the disruption in
energy and food markets caused by the war, and the unprecedented 1.60%
Advance Economics
tightening of global monetary conditions to combat decades-high inflation,
the global economy has slowed, but not stalled. Yet growth remains slow
and uneven, with growing global divergences. 4.10%
Emerging Economics
The global economy is limping along, not sprinting. Global activity bottomed
out at the end of last year while inflation— both headline and underlying 0.50%
(core)—is gradually being brought under control. But a full recovery toward Euro Area
pre-pandemic trends appears increasingly out of reach, especially in
emerging market and developing economies.
2.50%
US
The IMF's latest projections show global growth slowing from 3.5% in 2022
to 3% in 2023 and 2.9% in 2024, a slight downgrade from their July forecast.
This growth rate is much lower than the historical average. Headline 1.90%
Japan
inflation is expected to fall from 9.2% in 2022 to 5.9% in 2023 and 4.8% in
2024. Core inflation, which excludes food and energy, is also expected to
drop, but more slowly, reaching 4.5% in 2024. 0.50%
UK
These trends suggest a "soft landing," with inflation decreasing without
causing a major recession, particularly in the U.S., where unemployment is 5.20%
forecast to rise only slightly from 3.6% to 3.9% by 2025. China

However, there are some important differences emerging. The slowdown is

6.70%
hitting advanced economies harder than emerging markets and developing India
ones.

2023A 2024P 2025P

Source: IMF, WEO 3
Indian Economy
Overview India VS Global GDP Growth (%)
The Indian economy has exhibited remarkable resilience despite facing 9.10%
significant challenges from the global economic landscape. Despite the 6.80% 6.50%
7.20% 7.00% 6.50%
impact of tightening global monetary policies, slowing global growth, and
elevated commodity prices, India stands relatively well-positioned to 3.90%
withstand global headwinds compared to many other emerging markets.

In 2023, India showcased exceptional economic resilience by emerging as 2018A 2019A 2020A 2021A 2022A 2023A 2024P 2025P
the world's fastest-growing major economy, boasting a growth rate of 6.3%.
This growth momentum continues to attract investment, supported by
India's ability to offer large-scale operations to multinational corporations, a -5.80%
vast pool of skilled professionals, and its prowess in technological and
innovative advancements. Despite global economic challenges such as India WORLD
inflation and rising interest rates, India's economic performance remained
buoyant, buoyed by robust domestic demand, significant public
infrastructure investment, and a strengthening financial sector.
Indian GDP Quarterly Growth
As we approached 2024, India is well-positioned to maintain its status as
the fastest-growing major economy. With a positive outlook for the future,
Actual VS Projected
the country's economic prospects remain promising, setting the stage for 16.0%
further acceleration in the years ahead. Taking into account the various 14.0%

15.2%
factors, the real GDP growth for 2024-25 has now been projected at 7% 12.0%

13.5%
with quarterly growth of 7.2%, 6.8%, 7% and 6.9% in Q1 to Q4, respectively. 10.0%
The forecast is based on a normal monsoon for the year, which would also 8.0%
support rural consumption demand. The RBI Survey of Professional

8.4%
7.8%
7.7%
6.0%

7.6%
6.8%
Forecasters conducted in January 2024 provides a median forecast of real

6.6%
6.3%
6.2%

6.1%
4.0%
GDP growth of 6.5 per cent in 2024-25, revised upward from the forecast of

4.6%
4.6%
4.4%
4.1%
4.0%

2.0%
6.3% in November 2023 round of the survey.
0.0%

Overall, the Indian economy is on a robust trajectory towards becoming the

third-largest economy with a GDP of $5 trillion, reflecting its resilience and Actual Projected
potential for sustained growth. 4

Source: World Bank – India Development Update – November 2022

Indian Non-Alcoholic Beverages Industry

Market & Growth Forecast Market Opportunities

The Indian non-alcoholic beverages market is on a significant growth The Indian non-alcoholic beverages market presents several opportunities
trajectory, with a projected compound annual growth rate (CAGR) of 8.85% for growth:
from 2022 to 2027. By 2030, the market is expected to reach ₹1.47 trillion. • Demographic Shifts: A young population with rising disposable incomes
This robust growth is driven by various factors including rising health is driving demand for a diverse range of beverage options.
awareness, urbanization, and increasing disposable incomes among young • Urbanization: The migration to urban areas is boosting demand for
consumers. convenient, ready-to-drink beverages.
• Rural Consumption: Growing incomes in rural areas are also contributing
Key Segment to market expansion.
1. Carbonated Soft Drinks (CSDs):
1. Current Status: CSDs remain the largest category by value within
Consumer Trends
the non-alcoholic beverages market. From 2016 to 2021, this • Health Consciousness: There is a growing trend towards healthier
segment recorded a CAGR of 9.78% beverage choices, with consumers opting for drinks that offer nutritional
2. Challenges: The growth of CSDs has been slowing down due to benefits. This shift is driving the demand for juices, bottled water, and
market saturation, increasing health awareness, and high low-calorie soft drinks
taxation aimed at reducing sugary drink consumption. • Innovative Packaging: Advances in packaging technology, such as laser
3. Innovations: Companies are incorporating natural and low- labeling, not only enhance product appeal but also reduce costs and
calorie sweeteners, such as stevia, to appeal to health-conscious
extend shelf life, making these products more attractive to consumers.
consumers. Technological advancements in packaging, like laser
labeling, also enhance product appeal and shelf life. Challenges
2. Juices and Bottled Water:
1. Growth Drivers: These segments are experiencing rapid growth • High Taxation: Most non-alcoholic beverages are subject to taxes ranging
due to their health benefits and consumer preference for natural from 12% to 28%, which can be a significant barrier to growth. These
ingredients. Innovative packaging and product formulations are taxes are particularly high on sugary drinks to discourage excessive
key drivers consumption.
2. Market Share: Juices and bottled water are becoming • Market Saturation: In the carbonated drinks segment, market saturation
increasingly popular, often preferred over carbonated drinks for and health concerns are slowing growth, pushing companies to innovate
their perceived health benefits and diversify their product offerings.

Source: ICRIER Report – 27 May, 2022, statista.com

Indian Non-Alcoholic Beverages Industry
Price Per Unit (In US$)
Future Outlook 2

The Indian soft drink market is set to boom as consumption continues to 1.56 1.6
1.52 1.54
rise, promising sustainable growth. The future of the Indian beverage 1.43 1.45 1.47 1.49
1.5 1.38 1.36
industry is bright, thanks to shifting demographics, the increasing spending 1.26
1.34
1.22 1.22
power of young consumers, rapid urbanization, and growing rural
consumption. With 80% of the non-alcoholic beverage sector still informal,
there’s immense potential for organized players to expand. 1

0.49 0.49 0.5 0.5 0.51 0.51 0.52 0.53

0.44 0.45 0.48 0.46 0.47
0.43
0.5

Volume Growth - In Billion Liters

5
0

4.54 4.58
4.5 4.39 CSD (at Home) CSD (Out of Home)
4.23
4.09
3.95
4
3.85 3.83
3.69
Conclusion
3.6
3.53 The Indian non-alcoholic beverages market is evolving rapidly, driven by
3.5 3.36 demographic changes, urbanization, and shifting consumer preferences
3.2 towards healthier options. While challenges such as high taxation and
3.03 market saturation persist, the potential for growth remains strong, especially
3 for companies that can innovate and adapt to these changing dynamics.

2.5
2014A 2015A 2016A 2017A 2018A 2019A 2020A 2021A 2022A 2023P 2024P 2025P 2026P 2027P
6

Source: ICRIER Report – 27 May, 2022, statista.com

 Analysis of Capital Expenditure and Growth Strategy
Historical Capex Overview
The company has historically demonstrated a strong commitment to capital 3. Go to Market Strategy: The aggressive "Go to Market" strategy
expenditure (Capex), with significant investments of approximately ₹1,000 necessitates significant Capex. This strategy is focused on rapidly scaling
crores in 2015 and ₹2,000 crores in 2019. These investments were up production, enhancing distribution networks, and increasing market
strategically aimed at expanding the company's production capabilities and penetration.
supporting its growth ambitions. Projected Capex and Growth Implication
Future Capex Commitments We project that the company will undertake the following Capex
investments:
Looking ahead, the company has committed to a substantial Capex cash • 2024: Approximately ₹2,400 crores.
outflow of around ₹2,400 crores, with an anticipated asset turnover ratio of • 2025: Around ₹1,500 crores.
2x. The allocation of this investment is strategic and multifaceted: • 2026: Approximately ₹2,100 crores.
• Direct Outflow: ₹1,200 crores will be allocated directly to enhance
production capacities. These investments are expected to drive substantial future growth by:
• Capital Work in Progress (CWIP): ₹500-600 crores will be reserved for • Increasing Production Capacity: Ensuring the company can meet rising
ongoing projects, ensuring continuous development and expansion. demand across various product segments.
• Brownfield Projects: ₹200 crores will be directed towards upgrading and • Enhancing Market Reach: Expanding into new geographical areas and
expanding existing facilities. improving distribution networks.
• Digital Retail Channels (DRC): The remaining funds will support digital • Innovating Product Offerings: Supporting the development of new,
initiatives, enhancing the company’s market reach and operational health-oriented products to cater to changing consumer preferences.
efficiency.
Strategic Focus Area Operating Efficiency
1. Greenfield Projects: The majority of the Capex will fund greenfield The company has control over end to end value chain such as
projects aimed at increasing the production capacity of carbonated soft Manufacturing, distribution, customer management, in-market execution,
drinks (CSD), value-added dairy beverages, and juices. These projects are cost efficiencies, and cash management. This lead to superior and robust
crucial for tapping into new markets and meeting the growing demand margins with contribution of highly efficient manufacturing systems and
for these products. distribution network.
2. New Product Segments: The company is particularly aggressive in
expanding its presence in the dairy and juice segments, which offer
substantial growth potential. These segments not only cater to evolving
consumer preferences for healthier options but also present
opportunities in previously untapped geographical markets. 7
 Analysis of Capital Expenditure and Growth Strategy
Long Term Growth Projections Acquisition of the Beverage Company (BevCo)
For the remaining future years, we anticipate a 10% growth in the gross VBL's acquisition of BevCo for ZAR 3 Billion (~INR 13.20 billion) marks a
block. This consistent investment in Capex is expected to sustain the strategic move to expand its presence in Africa's lucrative soft drink market.
company’s growth trajectory, ensuring it remains competitive in the evolving BevCo's franchise and distribution rights from PepsiCo in South Africa,
market landscape. During the terminal year, Capex will be benchmarked with Lesotho, Eswatini, Namibia, and Botswana offer promising growth
depreciation (100% maintenance) to ensure moderate growth, maintaining opportunities. This acquisition is aligned with VBL's expansion goals and is
operational efficiency and asset quality. expected to yield significant synergistic benefits in the future. With a focus
on leveraging favorable demographics and high demand for soft drinks in
Africa, VBL positions itself for sustained growth and market leadership in
the region.

Capex & Capex % Sales

Conclusion
13.0%
2400
12.0%
The company's strategic Capex investments highlight its commitment to
growth and innovation. By focusing on expanding production capacity,
11.0%
1900
tapping into new market segments, and enhancing its distribution
10.0% network, the company is well-positioned to capitalize on future
9.0% opportunities. This proactive approach, coupled with a strong financial
1400 commitment, underlines the company’s long-term vision and growth
8.0%
potential.
7.0%
900 6.0%

5.0%

400 4.0%

This Space is left Blank Intentionally

Capex Capex as % Sales

9
 Product Wise Revenue Brand Wise Revenue
Financials
Revenue
5.0% 4%
Juice-Based 10%
Drinks
1. Revenue Growth: 23.0% Mountain 47%
• Varun Beverages Limited (VBL) has demonstrated impressive Pepsi
Packed
revenue growth, posting INR 160,426 Crores in CY2023. This Drinking Mirinda
72.0%
represents a Compound Annual Growth Rate (CAGR) of 23% and Water Seven-Up 17%
24% over the last 3 and 5 years, respectively. Such consistent Carbonated Others
growth is indicative of effective management and a strong market Soft
position. Drinks(CDS)
22%
2. Market Outlook:
• Management's optimism regarding the growth potential of the
Indian soft drink market is well-founded. Factors such as
increasing household income, urbanization, rural advancement,
and electrification are expected to drive demand.
• VBL's robust go-to-market strategy, with the addition of 400,000
- 500,000 new outlets annually, underscores its commitment to
Revenue
expanding its market presence. 60%
35,000.00
3. Future Growth Projections: 50%
• Analyst consensus estimates for CY2024 project revenue of INR 30,000.00
40%
2,00,755.0 crores, reflecting a substantial 25.1% increase over 25,000.00
30%
CY2023. This forecast considers the company's historical growth
20,000.00 20%
trends and market dynamics.
• Despite potential challenges such as adverse weather conditions, 15,000.00 10%
health awareness trends, and regulatory policies, VBL is 10,000.00 0%
anticipated to maintain double-digit growth of 21%. This 5,000.00 -10%
projection is supported by the increasing popularity of its energy
drink brand "Sting" and recent capital expenditures aimed at 0.00 -20%

expanding capacity in sports drinks, juices, and dairy beverages.

Revenue Revenue Growth % YOY
Financials
• Historical Performance and Benchmarking:
Gross Margin • Historically maintained robust gross margins (52%-57%),
In analyzing Varun Beverages Limited's (VBL) gross profit dynamics, several outperforming industry peer:
key insights emerge. VBL has demonstrated remarkable resilience in • Indian non-alcoholic beverage sector (52.2%)
navigating fluctuations in raw material costs, which constitute a substantial • Global emerging market (43.7%)
portion of its Cost of Goods Sold (COGS) and revenue, at approximately 96% • Global sector (49.13%)
and 44%, respectively. • Long-Term Outlook:
• While short-term margin retractions may occur, long-term
This resilience is exemplified by the company's ability to achieve a notable outlook remains promising:
improvement in gross margins, increasing by 137 basis points (bps) in • Proactive measures, strategic partnerships, and
CY2023 to reach 53.8%, primarily attributed to the softening of PET chip sustainable practices position VBL for sustained and
prices despite a slight uptick in sugar prices during the year. potentially enhanced gross margin performance.

Looking forward, the outlook on raw material prices appears favorable,

buoyed by India's surplus sugar production and expectations of a slowdown
in inflationary cycles, mitigating potential spikes in sugar prices. Additionally,
VBL's strategic joint venture with Indorama to manufacture recycled PET
showcases the company's proactive approach to addressing raw material
Gross Margin % Reveue
challenges, aiming to fulfill a significant portion of its PET requirement 58.0%
through recycled PET by the end of 2025, emphasizing sustainability and 57.0%
cost efficiency.
56.0%

• Resilience to Raw Material Costs: 55.0%

• VBL effectively manages fluctuations in raw material costs, 54.0%

57.1%
constituting 96% of COGS and 44% of revenue. 53.0% 56.0%

54.8%
• Improvement in Gross Margin:

54.3%

53.8%
52.0%
• ross margins increased by 137 bps in CY2023 to 53.8%, driven by

53.0%

53.0%

53.0%

53.0%

53.0%
52.5%
softening PET chip prices. 51.0%

• Strategic Initiatives: 50.0%

• Joint venture with Indorama aims to fulfill 20-25% of PET
requirement by 2025, emphasizing sustainability and cost
efficiency.
10
Financials
Analysis of Selling, General and administrative
Historical & Projected SG&A Expenses
(SG&A) Expenses
Over the past ten years, SG&A expenses have consistently been around 33%
to 34% of total revenue. Key components such as employee benefits, power
Overview of SG&A Expenses and fuel, general and administrative expenses, and other operating expenses
The company’s other operating expenses account for an average of 34.9% of account for about 87% to 88% of total SG&A expenses. For future
total SG&A expenses, making it the largest component within this category. projections, we assume total SG&A expenses will remain around 33% of
Employee costs rank second, contributing significantly to the overall SG&A revenue, aligning with both market estimates and management guidance
expenses. Historically, SG&A expenses have comprised approximately 33%
to 34% of the company's total revenue over the past decade.

Consensus Estimates & Management Guidance

SG&A Expense % Revenue
Consensus estimates suggest that SG&A expenses are projected to range
from 30% to 32% of total revenue. Management has provided guidance that 13000 40.0%
the EBITDA margin will remain between 21% and 22% in the coming years.
11000
This projection aligns with a cost of goods sold (COGS) ratio of approximately
35.0%
45% to 46% and SG&A expenses ranging from 30% to 33%. For our 9000
estimates, we have conservatively assumed SG&A expenses to be at the
higher end of this range, around 33%, recognizing the potential for these 7000 30.0%
costs to increase.
5000
25.0%
EBITDA Performance & Projections 3000

In 2023, the company’s EBITDA increased by 29.5%, reaching ₹3,609.49 1000 20.0%
crores, with EBITDA margins improving by 133 basis points to 22.5%. This
growth was primarily due to the softening of key raw material prices.
SG&A Expenses SG&A Expenses % Revenue
Management remains focused on controlling operating expenses and has
reiterated its EBITDA margin guidance of approximately 21% to 22%.

11
Financials
Inventory Analysis Inventory Days
The company strategically increases its inventory levels during the October- 6000
120
December and January-March quarters to prepare for seasonal demand.
This period coincides with the lowest resin prices of the year, allowing the 5000 115
company to pre-stock raw materials cost-effectively, thereby enhancing
110
gross profitability. A similar strategy is applied to PET chips to boost overall 4000
efficiency. 105
3000 100
Historically, the company maintains inventories at approximately 12.9% of
revenues, with a consistent inventory turnover ratio of around 8x, resulting 95
2000
in an inventory holding period of about 97 days (based on COGS). In
comparison, peer companies in the market maintain a median inventory 90
holding period of 53 days, which is lower than the company's 10-year 1000
85
historical average. Current street estimates indicate that the company's
inventory level may increase by 8 days from the existing 97 days. 0 80

We project that inventory levels will rise by 8 days, from 97 days to 105 days,
Inventory Inventory Days
in FY 2024 and 2025. This increase is attributed to the launch of new
products in the energy drink, value-based dairy, sports drinks, and juices
segments. Following this period, inventory levels are expected to normalize
back to 97 days.

Summary:
• Current inventory holding period: 97 days
• Projected increase: 8 days
• New inventory holding period: 105 days
This Space is left Blank Intentionally
This adjustment reflects the company's strategy to support new product
launches and will normalize afterward.

12
Financials
Trade Receivable Analysis Trade Receivable Days
During the April to June quarter, the company experiences a seasonal 900.0 13
increase in receivables. However, these receivables are efficiently collected
800.0 12
by year-end, maintaining consistent receivables levels of 8-9 days,
representing 2.4% of revenues. 700.0
11
600.0
The company has a robust collection mechanism, with 86% of receivables 10
due for less than six months and no significant credit risk from any single 500.0
counterparty. The company deals only with creditworthy counterparties 9
400.0
who provide security deposits upon onboarding. Receivables are diversified
8
across numerous customers of various scales and geographies, minimizing 300.0
credit impairment risks. 7
200.0

Historically, the company maintains receivables at 2.4% of revenues, with a 100.0 6

median receivables turnover ratio of 41x and receivables days at 8. In
-- 5
comparison, peer companies maintain a median of 7 receivable days. Street
estimates indicate that the company’s receivables days will remain flat at 8-
9 days. Trade Receivable Receivable Days

Summary:
• Current receivables days: 8
• Historical receivables % of revenue: 2.4%
• Receivables turnover ratio: 41x
• Peer median receivables days: 7
• Projected receivables days: 8-9

This Space is left Blank Intentionally

The company's efficient collection system and credit risk management
ensure stable receivables levels, with no significant credit impairment
expected in the near future

13
Financials
Trade Payable Analysis Trade Payable Days
2,500.0 70
The company has historically maintained a consistent payable period 65
ranging from approximately 44 to 50 days, with a deviation during the 2,000.0 60
COVID-affected year when payables experienced delays. However, in 2023, 55
the payable period was reported at 34 days, reflecting a deviation from the 1,500.0
50
norm. Traditionally, trade payables have represented around 13% of the
45
cost of goods sold (COGS) and approximately 6% of revenue. Street 1,000.0
40
estimates suggest that payable levels will stabilize at around 39 days,
potentially increasing by an additional 5 to 6 days from the current level of 500.0 35

34 days. In the absence of specific management guidance, our research 30

--
leads us to assume that the payable days will remain at approximately 40 25
2018A 2019A 2020A 2021A 2022A 2023A 2024E 2024E 2024E 2024E 2024E
days.
Trade Payable Payable Days

This Space is left Blank Intentionally

14
Financials
Borrowings (Debt) Analysis Long Term & Short Term Borrowings
In recent years, the company has made significant strides in reducing its long- 100.0%
term (LT) debt, decreasing from approximately 83% of total debt in CY2017 90.0%

32.3%
34.2%
to 61% in CY2023. This reduction has corresponded with improvements in

41.5%
80.0%

46.7%

48.0%
key debt metrics, including a decline in the debt-to-equity ratio from 1.2x to

54.3%

61.4%
0.07x, demonstrating a stronger financial position. Other indicators, such as 70.0%

73.7%
debt to capital (0.5x to 0.4x), debt to assets (0.4x to 0.3x), and debt to

82.7%

83.4%
84.0%
60.0%
EBITDA (2.4x to 1.4x), have also shown favorable trends, indicating a more
50.0%
sustainable debt profile on a year-on-year basis.
40.0%

67.7%
65.8%
Management guidance aims to further reduce the debt-to-EBITDA ratio to 1x

58.5%
30.0%

53.3%

52.0%
from 1.3x in 2022, demonstrating a commitment to continued debt

45.7%

38.6%
20.0%
reduction. The company's strategic approach includes increased utilization of

26.3%
17.3%

16.6%
short-term borrowings (STB) to fund cyclical operations, resulting in higher

16.0%
10.0%
debt levels before peak seasons (December) and lower levels after (June). 0.0%
The company anticipates maintaining debt levels constant in the short term.

Historically, the debt-to-EBITDA ratio has averaged around 1.31x and has ST Borrowings % TB LT Borrowings % TB
consistently improved over the past few years. For forecasting purposes, we
will use the debt-to-EBITDA ratio as the primary indicator, assuming it will
remain around 1.30x for the forecast period, with a yearly improvement of
approximately 10%. This approach accounts for the company's strategy of
reducing LT borrowings while increasing reliance on ST borrowings to meet
seasonal funding requirements. As a result, short-term borrowings are
estimated to represent around 11% of revenue, with a 10% yearly increment
for the forecast period, reflecting the company's focus on improving long-
term borrowing indicators. This Space is left Blank Intentionally

15
Valuation
Objective Not all multiples are applicable to every company. Therefore, the relevant
multiples should be chosen carefully & adjusted for differences between the
The objective is to reach at the intrinsic value of the Varun Beverages Ltd. comparable. For the valuation of Britannia Industries Ltd., we have chosen
Stock. The analysis aims to assess the company’s worth on the basis its EV/EBITDA multiple .
ability to generate cashflows, future growth and risk associated with the
business. We have carefully considered management’s guidance for Assets Approach
performing this analysis.
Under this approach, the value of the business is derived basis difference
between the value of assets & liabilities. This approach is focuses on
Valuation Methodology determining the value of net assets from the perspective of equity valuation.
There are primarily 3 approaches in Valuation (viz., Cost Approach, Market The value of net assets can be determined as follows; Net assets = Total
Approach & income Approach).For any valuation, all the approaches may Assets - Total External Liabilities. The value of net assets is also known as
not be relevant & therefore will not give fair estimate of value. Hence, the Book Value of equity
approach most suitable for specific business/company must be applied in
the valuation exercise based on common practices. Income Approach
The 3 approaches generally adopted in valuation are as under: Under this approach, the value of the business is derived by considering the
1. Market Approach: Comparable Companies Method & Comparable cash flows, future growth & weighted average cost of capital which is
Transaction Method. signifies risk.
2. Income Approach: Discounted Cash Flow Method.
3. Asset Approach: Net Asset Value Method. There are 4 major steps in Income Approach:

1. Forecasting future cash flows for explicit growth period.

Market Approach 2. Discounting these cash flows to present value at the rate of return which
Under this method, we measure the value of business of the company by depicts the risk in realizing the future cash flows & expected growth.
applying the market multiples of listed companies which trade actively and 3. Calculation of terminal value of free cash flows post explicit growth
possess attributes similar & comparable with the target company. This period
methodology is based on the principle that such market pricing taking place 4. Addition of present value of terminal cash flows & free cash flows during
between informed buyers and informed sellers while considering all the explicit forecast period.
relevant factors.

16
DCF Valuation
Actual Explict Forecast Period
In INR Crores unless stated otherwise FY 2019A FY 2020A FY 2021A FY 2022A FY 2023A FY 2024F FY 2025F FY 2026F FY 2027F FY 2028F FY 2029F FY 2030F FY 2031F FY 2032F FY 2033F

Free Cash Flow to Firm

EBITDA ₹ 1,448 ₹ 1,202 ₹ 1,655 ₹ 2,788 ₹ 3,610 ₹ 3,882 ₹ 4,639 ₹ 5,475 ₹ 6,378 ₹ 7,335 ₹ 7,552 ₹ 7,639 ₹ 7,566 ₹ 7,303 ₹ 6,816
Less: Deprecation & Amortisation (₹ 489) (₹ 529) (₹ 531) (₹ 617) (₹ 681) (₹ 687) (₹ 845) (₹ 992) (₹ 935) (₹ 1,029) (₹ 1,131) (₹ 1,235) (₹ 1,338) (₹ 1,439) (₹ 1,523)
EBIT ₹ 959 ₹ 673 ₹ 1,123 ₹ 2,171 ₹ 2,929 ₹ 3,196 ₹ 3,795 ₹ 4,483 ₹ 5,443 ₹ 6,306 ₹ 6,420 ₹ 6,404 ₹ 6,228 ₹ 5,864 ₹ 5,293
Less: Tax (₹ 240) (₹ 168) (₹ 281) (₹ 543) (₹ 732) (₹ 799) (₹ 949) (₹ 1,121) (₹ 1,361) (₹ 1,577) (₹ 1,605) (₹ 1,601) (₹ 1,557) (₹ 1,466) (₹ 1,323)
EBIT (1-T) ₹ 719 ₹ 505 ₹ 843 ₹ 1,628 ₹ 2,197 ₹ 2,397 ₹ 2,846 ₹ 3,362 ₹ 4,082 ₹ 4,730 ₹ 4,815 ₹ 4,803 ₹ 4,671 ₹ 4,398 ₹ 3,970
Add: Deprecation & Amortisation ₹ 489 ₹ 529 ₹ 531 ₹ 617 ₹ 681 ₹ 687 ₹ 845 ₹ 992 ₹ 935 ₹ 1,029 ₹ 1,131 ₹ 1,235 ₹ 1,338 ₹ 1,439 ₹ 1,523
Cash NOPAT ₹ 1,208 ₹ 1,034 ₹ 1,374 ₹ 2,245 ₹ 2,878 ₹ 3,084 ₹ 3,691 ₹ 4,354 ₹ 5,017 ₹ 5,758 ₹ 5,947 ₹ 6,038 ₹ 6,009 ₹ 5,837 ₹ 5,493

Less: Reinvestmets
Change in Working Capital ₹ 26 ₹ 106 (₹ 28) ₹ 53 (₹ 473) ₹ 965 (₹ 416) (₹ 290) (₹ 32) (₹ 818) (₹ 145) (₹ 180) (₹ 218) (₹ 261) (₹ 308)
Capex During the year (₹ 1,869) ₹ 70 ₹ 143 (₹ 667) (₹ 1,477) (₹ 2,400) (₹ 1,500) (₹ 2,100) (₹ 1,417) (₹ 1,558) (₹ 1,714) (₹ 1,729) (₹ 1,716) (₹ 1,675) (₹ 1,408)
Free Cash Flow to Firm (₹ 635) ₹ 1,210 ₹ 1,488 ₹ 1,632 ₹ 928 ₹ 1,648 ₹ 1,775 ₹ 1,963 ₹ 3,568 ₹ 3,382 ₹ 4,087 ₹ 4,130 ₹ 4,075 ₹ 3,900 ₹ 3,776

Discount period (year) Mid Year Yes 0.50 1.50 2.50 3.50 4.50 5.50 6.50 7.50 8.50 9.50
Discount Rate (WACC) Convention? 9%

Discounting Factor 0.96 0.88 0.81 0.74 0.68 0.62 0.57 0.52 0.48 0.44

Present Value of Free Cash Flow to Firm ₹ 1,579 ₹ 1,559 ₹ 1,583 ₹ 2,639 ₹ 2,295 ₹ 2,544 ₹ 2,359 ₹ 2,135 ₹ 1,875 ₹ 1,665

DCF Calculation - Perpetuity Growth DCF Calculation - EXIT Multiple WACC

Market
Exit Multiple 16.00x Capitalization INR 0.0 7.0% 8.0% 9.0% 9.5% 10.0%
Perpetual Growth Rate 5.50% Terminal EBITDA 3.0% ₹ 46,508 ₹ 39,636 ₹ 34,306 ₹ 32,067 ₹ 30,055

Perpetuity Growth
₹ 6,816 1,95,638 crores
Terminal Year FCFF x (1+PGR) ₹ 3,984 Terminal Value 4.0% ₹ 46,792 ₹ 39,864 ₹ 34,491 ₹ 32,235 ₹ 30,208
₹ 44,268 ₹ 1,09,053
Terminal Value
Present Value of Terminal Value ₹ 48,093 5.5% ₹ 47,217 ₹ 40,204 ₹ 34,769 ₹ 32,487 ₹ 30,437
Present Value of Terminal Value ₹ 19,523 Present Value of FCFFs ₹ 20,233 6.0% ₹ 47,359 ₹ 40,318 ₹ 34,861 ₹ 32,571 ₹ 30,513
Intrinsic Value
Present Value of FCFF ₹ 20,233 Enterprise Value ₹ 68,326 INR 34,769 Crores 7.0% ₹ 47,643 ₹ 40,545 ₹ 35,047 ₹ 32,739 ₹ 30,666
Enterprise Value ₹ 39,756 7.5% ₹ 47,785 ₹ 40,659 ₹ 35,139 ₹ 32,822 ₹ 30,742
Implied Exit Multiple 10.02x WACC
Implied Exit Multiple 5.83x Implied EV/EBITDA 10.02x ### 7.0% 8.0% 9.0%9.5% 10.0%
Implied EV/ EBITDA 11.01x WACC
13x ₹ 63,881 ₹ 58,883 ₹ 54,322 ₹ 52,192 ₹ 50,155

Exit Multiple
Less: Total Debt 9%
(₹ 5,195) 14x ₹ 67,465 ₹ 62,164 ₹ 57,328 ₹ 55,070 ₹ 52,911
Less: Total Debt (₹ 5,195) Add: Cash ₹ 460
Add: Cash ₹ 460 15x ₹ 71,049 ₹ 65,445 ₹ 60,334 ₹ 57,948 ₹ 55,667
Less: Minority interest (₹ 148) Less: Minority interest (₹ 148) 16x ₹ 74,633 ₹ 68,726 ₹ 63,340 ₹ 60,826 ₹ 58,423
Equity Value ₹ 34,873 Equity Value ₹ 63,444 17x ₹ 78,217 ₹ 72,007 ₹ 66,346 ₹ 63,704 ₹ 61,179
Terminal Growth
Less: Option Value (₹ 104) Less: Option Value (₹ 104) 5.50% 18x ₹ 81,801 ₹ 75,288 ₹ 69,351 ₹ 66,582 ₹ 63,935
Equity Value for Shareholder ₹ 34,769 Equity Value for Shareholder ₹ 63,340 17
Relative Valuation
Company Name Ticker Enterprice Value EBITDA EV/EBITDA ROIC Revenue Growth Debt/EQUITY DEP/EBITDA EBITDA Margin Tax Rate
Coca - Cola Europacific Partners PLC NASDAQ: CCEP 43,219.0 3,301.0 13.1x 8.7% 10.4% 1.43x 19.8% 16.24% 23.8%
Celsius Holdings, Inc. NASDAQ: CELH 18,441.0 370.4 49.8x 70.5% 101.7% 0.01x 0.9% 26.20% 24.8%
Keurig Dr Pepper Inc NASDAQ: KDP 60,277.0 3,950.0 15.3x 6.7% 5.4% 0.61x 13.6% 26.48% 21.7%
Monster Beverages Corp. NASDAQ: MNST 50,308.8 2,230.0 22.6x 18.8% 13.1% 0.01x 3.5% 30.40% 22.0%
Varun Beverages Ltd. NSE: VBL ₹ 82,345.13 ₹ 3,609.00 22.8x 28.82% 16% 0.78x 18.8% 22.50% 23%
Relative Va lua tion a s p e r Regressio n A p p r o a c h
Relative Pricing - Comparable
E V / E B I T D A M u l t i pl e 22.8x
A total of 15 Companies were screened as using FINVIZ stock screener. The shortlisting Criteria
EBITDA ₹ 3,609.0
are as below:
Enterprice Value ₹ 82,345.1
• Industry Classification: Non Alcoholic - Beverages
Less: Total De bt (₹ 5 , 1 9 4 . 5 )
• Sector: Consumer Defensive
Add: C a sh ₹ 459.9
• Market Cap: Large ($10Bln to $200Bln)
L e s s : M i n o r i t y i nt e r e st (₹ 1 4 8 . 2 )
Multiple variables were assessed via corelation matrix and followings were selected due to
Equity Value ₹ 77,462.3
higher relatively higher corelation with EV/EBITDA Ratio.
Less: Option Value (₹ 1 0 4 . 0 )
• Revenue Growth Rate
Equity Value for Shareholder ₹ 77,358.3
• Return on Invested Capital
SUMMARY OUTPUT • Debt/ Equity Ratio
R e g r e s s i o n Statistics The Regression Equation is provided below:
Multiple R 1
R Square 1 EV/EBITDA = 15.04+31.64*(Return on Invested Capital)+12.29*(Revenue Growth)-4.18*(Debt/Equity)
Adjusted R Square 65535
Standard Error 0
Observations 4

ANOVA
df SS MS F Significance F
Regression 5 857.5180277 171.5 # N UM ! #NUM!
Residual 0 0 65535
Total 5 857.5180277

Coefficients S tand ard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 15.03989004 0 65535 #N UM! #VALUE! #VALUE! 15.03989004 15.03989004
ROIC 31.63553408 0 65535 #N UM! 31.63553408 31.63553408 31.63553408 31.63553408
Revenue Growth 12.28667746 0 65535 #N UM! 12.28667746 12.28667746 12.28667746 12.28667746
Debt/EQUITY -4.183987021 0 65535 #N UM! -4.183987021 -4.183987021 -4.183987021 -4.183987021
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Weighted Average Cost of Capital (WACC)
WACC Inputs Risk free Rate
Country India D e b t t o C apit al (Ge aring ) 4 2 .3 % We have considered 4.73% as the risk free rate in estimation of
Local Currency 10 yr Govt Bond yield 7.12% Marginal Tax Rate 2 5 .0 % cost of equity of 8.81%. The risk free rate of India is calculated by
India's Moodys Soverign Rating Baa3 C o m p a n y C re dit R a t i n g A vailab le ? Yes
Credit Default Spread as per DR Damodaran 2.39% C o m p a n y is L a r g e S ize o r S m a l l S ize L considering local currency 10 years government bond yield adjusted
Implied US Equity Risk Premium 4.15% P r o v i d e C red it R a t i n g Aa2/AA for default spread of India.
Assets Beta 0.40 I nt e rest C o v e r a g e Ra t io 1 0 . 9x
Assets Beta Variation (+/-) 0.05 IC R Based Corporate Default S pread 0 .6% Assets Beta
DEbt to Equity Ratio 74.9% S m a l l S ize P r e m i u m 0 .0% We have estimated as assets beta range of 0.35 to 0.45, with a mid
point of 0.40 based on observed median of 5 year monthly assets
Particular Low Mid High beta of benchmark listed companies adjusted for blume effect.

Risk Free Rate 4.73% 4.73% 4.73% Equity Risk Premium

An ERP of 6.54% has been adopted based on US implied equity risk
Equity Risk Premium 6.54% 6.54% 6.54%
premium, relative equity volatility of ICE BoFA Public Sector Issue
Assets Beta 0.35 0.40 0.45 Emerging MKTS Index, S&P Emerging BMI Index and country risk
Debt/Eqity Ratio 74.89% 0.75 74.89% premium of India.
Equity Ratio 0.55 0.62 0.70
Equity Risk Premium
C A PM Cost of Equity 8.3% 8.8% 9.3%
For the purpose of assessing the cost of debt, we have used country's risk
Small Size Premium 2.7% 2.7% 2.7% free rate, country's default spread and corporate default spread based on
Assets Specific Premium 0% 0% 0% company's debt rating and interest coverage ratio.
Moodfied Cost of Equity 11.0% 11.5% 12.0% Small Size Premium
Emperically small sized assets have exceeded the return as
Pre Tax Cost of Debt 7.82% 7.82% 7.82%
compared to large sized assets. We have used the study on size
Marginal Tax Rate 25.0% 25.0% 25.0% premium conducted by Incwert which is based on difference
Post Tax Cost of Tax 5.9% 5.9% 5.9% between actuals returns and CAPM expected returns arranged in
Capital Gearing (D/D+E) 42.30% 42.30% 42.30% decile basis market capitalisation of Indian companies.
Weighted Average Cost of Capital 8.83% 9.12% 9.42%
Weighted Average Cost of Capital (Rounded) 9.00% 9.00% 9.00%
1. Tax Rate Considered as Marginal Tax Rate of India
2. Assets Beta is Considered as median of 5 years Beta of Comps adjusted for Blume affect
3. Equity Beta = Asstes Beta*(1+(1-Tax Rate %)*(D/E)

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Blume - Beta Analysis 5 Year - Monthly
No of Monthly Asstes 5 Years Equity 5 years Avg Narrow
Comparable Company Ticker Market Cap Considered?
observation Beta Avg. D/E Beta D/(D+E) Set
PepsiCo, Inc NasdaqGS: PEP 60 232035 0.22 240% 0.63 66% Y True
The Coco Cola Company NYSE: KO 60 245311 0.30 164% 0.66 58% Y True
Fomento Economic Mexicano NYSE: FMX 60 38947 0.27 84% 0.44 38% N FALSE
Coco Cola Europecific ENXTAM: CCE 60 28049 0.30 162% 0.67 52% Y True
Coco Cola FEMSA NYSE: KOF 60 17132 0.40 84% 0.65 35% Y True
Coco Cola HBC LSE: CCH 60 9642 0.42 101% 0.73 52% Y True
Suntory Beverages & Food Limited TSE: 2587 60 9443 0.37 12% 0.40 8% N FALSE
Monster Beverages NASDAQ: MNST 60 57806 0.69 1% 0.70 0% Y True
Coco Cola Bottler Japan TSE:2579 60 2394 - 38% 0.33 27% N FALSE
Coco Cola Icececk IBSE: CCOLA 60 3751 0.27 91% 0.45 44% N FALSE
Median - Broad Set 0.30 88% 0.64 41%
Average - Broad Set 0.36 98% 0.56 38%
Median - Considered 0.35 132% 0.67 52%
Average - Considered 0.39 125% 0.67 44%

We are taking Asset beta as 0.35x which is the median Beta of the considered set, over the period the company's Beta will lien towards Market beta i.e.,1
for calculation of Blume effect 0.33 and 0.67 weightage has been assigned to market beta and beta, respectively.

Blume Beta= 0.33(Market Beta)+0.67(Company Equity Beta)

This Space is left Blank Intentionally

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DuPont Analysis - Return on Equity & Return on Assets DuPont Analysis Summary
Return on Equity (ROE)
Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 From March 2016 to March 2023,
Net Profit ₹ 46 ₹ 214 ₹ 300 ₹ 472 ₹ 357 ₹ 746 ₹ 1,550 ₹ 2,102 the company's financial
Average Shareholder Equity ₹ 847 ₹ 1,724 ₹ 1,887 ₹ 2,683 ₹ 3,474 ₹ 3,893 ₹ 4,706 ₹ 6,150 performance improved
Return on Equity (ROE) 5.4% 12.4% 15.9% 17.6% 10.3% 19.2% 32.9% 34.2% significantly, as shown by the
DuPont Analysis. The Return on
ROE - DuPont Equation Equity (ROE) rose from 5.4% to
Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 34.2%.
Net Profit ₹ 46 ₹ 214 ₹ 300 ₹ 472 ₹ 357 ₹ 746 ₹ 1,550 ₹ 2,102
Revenue ₹ 3,861 ₹ 4,004 ₹ 5,105 ₹ 7,130 ₹ 6,450 ₹ 8,823 ₹ 13,173 ₹ 16,043 Key Metrics:
Net Profit Margin (A) 1.2% 5.3% 5.9% 6.6% 5.5% 8.5% 11.8% 13.1% 1. Net Profit Margin: Increased
Revenue ₹ 3,861 ₹ 4,004 ₹ 5,105 ₹ 7,130 ₹ 6,450 ₹ 8,823 ₹ 13,173 ₹ 16,043 from 1.2% to 13.1%, indicating
Average Total Assets ₹ 2,416 ₹ 5,057 ₹ 5,658 ₹ 7,210 ₹ 8,423 ₹ 8,998 ₹ 10,578 ₹ 13,403 better profitability.
Assets Turnover Ratio (B) 1.6X 0.8X 0.9X 1.0X 0.8X 1.0X 1.2X 1.2X 2. Asset Turnover Ratio: Ranged
from 1.6x to 1.2x, showing
Average Total Assets ₹ 2,416 ₹ 5,057 ₹ 5,658 ₹ 7,210 ₹ 8,423 ₹ 8,998 ₹ 10,578 ₹ 13,403
changes in asset efficiency.
Average Shareholder Equity ₹ 847 ₹ 1,724 ₹ 1,887 ₹ 2,683 ₹ 3,474 ₹ 3,893 ₹ 4,706 ₹ 6,150
3. Equity Multiplier: Dropped
Equity Multiplier (C) 2.9X 2.9X 3.0X 2.7X 2.4X 2.3X 2.2X 2.2X
from 2.9x to 2.2x, indicating
Return on Equity (ROE) (A*B*C) 5.4% 12.4% 15.9% 17.6% 10.3% 19.2% 32.9% 34.2% less reliance on debt.
Return on Asstes (ROA) Return on Assets (ROA) increased
Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 from 1.9% to 15.7%, showing
Net Profit ₹ 46 ₹ 214 ₹ 300 ₹ 472 ₹ 357 ₹ 746 ₹ 1,550 ₹ 2,102 better asset profitability. Overall,
Average Total Assets ₹ 2,416 ₹ 5,057 ₹ 5,658 ₹ 7,210 ₹ 8,423 ₹ 8,998 ₹ 10,578 ₹ 13,403 the company became more
Return on Assets 1.9% 4.2% 5.3% 6.5% 4.2% 8.3% 14.7% 15.7% profitable, used assets more
ROA - DuPont Equation efficiently, and reduced debt over
Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 these years.
Net Profit ₹ 46 ₹ 214 ₹ 300 ₹ 472 ₹ 357 ₹ 746 ₹ 1,550 ₹ 2,102
Revenue ₹ 3,861 ₹ 4,004 ₹ 5,105 ₹ 7,130 ₹ 6,450 ₹ 8,823 ₹ 13,173 ₹ 16,043
Net Profit Margin (A) 1.2% 5.3% 5.9% 6.6% 5.5% 8.5% 11.8% 13.1%
Revenue ₹ 3,861 ₹ 4,004 ₹ 5,105 ₹ 7,130 ₹ 6,450 ₹ 8,823 ₹ 13,173 ₹ 16,043
Average Total Assets ₹ 2,416 ₹ 5,057 ₹ 5,658 ₹ 7,210 ₹ 8,423 ₹ 8,998 ₹ 10,578 ₹ 13,403
Assets Turnover Ratio (B) 1.6X 0.8X 0.9X 1.0X 0.8X 1.0X 1.2X 1.2X
Return on Assets (ROA) (A*B) 1.9% 4.2% 5.3% 6.5% 4.2% 8.3% 14.7% 15.7% 21
Valuation Summary
Equity Value Available Discount / Discount / Over/Under
Valuation Method Enterprice Value Value Per Share Market Price
for Shareholder Premium Premium % Valued ?
Discoounted Cash Flow - Perpetuity Growth ₹ 39,755.8 ₹ 34,769.0 ₹ 535.2 ₹ 1,429.0 ₹ 893.8 62.5% Over - Valued
Discoounted Cash Flow - Exit Multiple ₹ 68,326.5 ₹ 63,339.7 ₹ 975.0 ₹ 1,429.0 ₹ 454.0 31.8% Over - Valued
Relative Valuation - EV/EBITDA ₹ 82,345.1 ₹ 77,358.3 ₹ 1,190.8 ₹ 1,429.0 ₹ 238.2 16.7% Over - Valued

Analysis
According to DCF Valuation the share is trading at a premium of INR 893.8 and INR 454.0 for perpetuity growth method and Exit multiple, respectively. However,
according to relative valuation the share is trading at a premium of INR 238.2 according to EV/EBITDA method, EV/EBITDA Multiple derived through regression approach
as per by Professor Aswath Damodaran.

Analysis Considering DCF Valuation for perpetual Growth

According to DCF Valuation the share is trading at a premium of INR 893.8 representing share is overvalued this is because of various factors such as:
• Strong Brand Reputation: : Varun Beverages Ltd. enjoys a dominant position in the Indian Non Alcoholic Beverages & Carbonated soft drinks market with a well-
established brand image of PepsiCo. Consumers trust their products for quality and taste.
• Robust Distribution Network: The Company’s solid and well-entrenched distribution network covers urban, semi-urban, and rural markets, addressing the demands of
a wide range of consumers. The Company has 37 manufacturing facilities in India and 6 internationally. It has a robust supply chain with 110+ owned depots, 2,500+
owned vehicles, 2,400+ primary distributors, and currently installed 925,000+ visi-coolers.
• Acquisition in South Africa: The company acquired a 100% stake in the business conducted by The Beverage Company (Proprietary) Limited, South Africa along with its
wholly-owned subsidiaries ("BevCo") for ~Rs. 13200 crores).
• Future Growth:
• Working capital efficiencies
• Disciplined capex investment
• Territory acquisition
• Commencement of Commercial Production at 3 Greenfield facilities:
• For CY2024 season, VBL commissioned three greenfield production facilities in India as follows –
• in Supa, Maharashtra on Jan 25, 2024 with total capex outlay of ~ INR 10,000 MN,
• o in Gorakhpur; Uttar Pradesh on Apr 13, 2024 with total capex outlay of ~ INR 11,000 MN, and
• in Khordha; Odisha on Apr 30, 2024 with total capex outlay of ~ INR 7,000 MN.
• Further, VBL has set-up / expanded backward integration facilities at Guwahati plant as well as all the three above mentioned greenfield plants.
• Approval for incorporation of Varun Foods (Zimbabwe) Pvt. Ltd. to carry on the business of food products.
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Disclaimer: This report is made as part of educational assignment and is meant for educational purpose only. The author of the report is not liable for any
losses due to actions taken basis this report. It is advisable to consult SEBI registered research analyst before making any investments.

Prepared By: Yashwant Paliwal

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