Varun Beverages Limited (VBL) is a company based in India that operates as a franchisee of ‘PepsiCo’. It produces as well as distributes a wide range of carbonated soft drinks (CSDs). It is also engaged in the distribution of non-carbonated beverages (NCBs) including packaged drinking water under trademarks owned by PepsiCo.
The company has a market capitalization of Rs 102,454 crores. The scrip is up around 1.2 percent today and currently trades at Rs 1,577. In the last 6 months, the stock has gained around 40 percent ranging from Rs 1,132 to the current price levels.
During this month, the company’s Board and shareholders approved the stock split of equity shares in the ratio of 1:2 which is a sub-division of 1 equity share having a face value of Rs 10 into 2 equity shares having a face value of Rs 5.
According to the Block Deal data available on the BSE, Goldman Sachs (Singapore) PTE sold 270,595 equity shares in Varun Beverages at a trade price of Rs 1,557.2. The buying party in the above transaction is Sector Investment Funds PLC Sector Global Emerging Markets Fund buying the same number of shares at the matching price.
The financials portray a strong scenario of operations with increasing revenues and PAT numbers. According to the latest financial reports, operating revenues took a shift from Rs 2,257 crores in Q3 v/s Rs 3,953 crores during Q4. Moreover, the PAT increased from Rs 82 crores to Rs 439 crores exhibiting an increase of more than 400 percent.
Having a yearly comparison from March 2022 quarter v/s March 2023 quarter, the company has been successful in achieving growth in the above-discussed basic parameters with operating revenues going up from Rs 2,867 crores to Rs 3,953 crores and PAT moving from Rs 271 crores to Rs 439 crores keeping the timeframe the same.
In congruence with the positive movements in the numbers, the ratios have been on the rise as well with the return on equity (ROE) increasing from 19.62 percent in FY20-21 to 33.77 percent in FY21-22 and the return on capital employed (ROCE) shifting from 17.14 percent to 27.47 percent.
Written by Amit Madnani
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