Varun Beverages Ltd

NSE: VBL BSE: 540180

₹529.75

(1.46%)

Mon, 15 Jun 2026, 05:55 pm

Market Cap (in Cr)176505.12

PE Ratio56.30

Dividend0.29

Consumer Non-Durables

Beverages: Non-Alcoholic

24.5K

Varun Beverages Analysis

Pros

Dividends paid are thoroughly covered by earnings (6.8x coverage).
Dividends after 3 years are expected to be well covered by earnings (6.3x coverage).

Cons

Dividend payments have increased, but Varun Beverages only paid a dividend in the past 3 years.
Whilst dividend payments have been stable, Varun Beverages has been paying a dividend for less than 10 years.
Varun Beverages's pays a lower dividend yield than the bottom 25% of dividend payers in India (0.76%).
Varun Beverages's dividend is below the markets top 25% of dividend payers in India (3.08%).

Pros

Varun Beverages's earnings are expected to grow significantly at over 20% yearly.
Varun Beverages's earnings growth is expected to exceed the India market average.
Varun Beverages's earnings growth is expected to exceed the low risk savings rate of 7.2%.
Varun Beverages's earnings are expected to increase by more than the low risk growth rate in 3 years time.
Performance (ROE) is expected to be above the current IN Beverage industry average.
An improvement in Varun Beverages's performance (ROE) is expected over the next 3 years.
Varun Beverages's revenue growth is expected to exceed the India market average.

Cons

Cash flow for Varun Beverages is expected to increase but not above the 50% threshold in 2 years time.
Varun Beverages's earnings are expected to decrease over the next year.
Varun Beverages's net income is expected to increase but not above the 50% threshold in 2 years time.
Varun Beverages is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
Varun Beverages's revenue is expected to increase but not above the 50% threshold in 2 years time.
Varun Beverages's revenue is expected to grow by 15.9% yearly, however this is not considered high growth (20% yearly).

Pros

Varun Beverages is profitable, therefore cash runway is not a concern.
Varun Beverages is profitable, therefore cash runway is not a concern.
Debt is well covered by operating cash flow (38.2%, greater than 20% of total debt).
The level of debt compared to net worth has been reduced over the past 5 years (546.3% vs 101.7% today).
Interest payments on debt are well covered by earnings (EBIT is 3.3x coverage).

Cons

Varun Beverages's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Debt is not covered by short term assets, assets are 0.5x debt.
Varun Beverages's long term commitments exceed its cash and other short term assets.
Varun Beverages's level of debt (101.7%) compared to net worth is high (greater than 40%).
High level of physical assets or inventory.

Pros

Kapil's remuneration is about average for companies of similar size in India.
Kapil's compensation has been consistent with company performance over the past year, both up more than 20%.

Cons

The average tenure for the Varun Beverages board of directors is less than 3 years, this suggests a new board.
Varun Beverages individual insiders have sold more shares than they have bought in the past 3 months.

Pros

Varun Beverages's 1-year earnings growth exceeds its 5-year average (52.9% vs 39.2%)
Varun Beverages has delivered over 20% year on year earnings growth in the past 5 years.
Varun Beverages used its assets more efficiently than the IN Beverage industry average last year based on Return on Assets.
Varun Beverages has improved its use of capital last year versus 3 years ago (Return on Capital Employed).
Varun Beverages's earnings growth has exceeded the IN Beverage industry average in the past year (52.9% vs -6%).

Cons

Varun Beverages has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).

Pros

Cons

Varun Beverages's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
Varun Beverages's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
Varun Beverages is overvalued based on assets compared to the IN Beverage industry average.
Varun Beverages is overvalued based on earnings compared to the IN Beverage industry average.
Varun Beverages is overvalued based on earnings compared to the India market.
NSEI:VBL is up 2.4% underperforming the Beverage industry which returned 9.9% over the past month.
NSEI:VBL is up 2.4% underperforming the market in India which returned 8% over the past month.