( NSE: VBL | BSE: 540180 )

FINANCIAL
MODELING
REPORT

VARUN BEVERAGES LTD

(A Comprehensive Financial Model and Valuation Report)

AAYUSH JHA
 Table of Contents
1 Historical Financial Statements
2 Ratio Analysis
3 Common-Size Statements
4 Forecasting
Valuation
5 DCF
5a WACC
5b Beta-Regression
5c Return on Market
5d Intrinsic Growth
56 Sensitivity Analysis
6 Comparable Companies Valuation
7 Football Field Analysis
8 Value at Risk- Historical Approach
9 Dupont Analysis
10 Altman Z Score Analysis
 VARUN BEVERAGES LTD
( NSE: VBL | BSE: 540180 )

Historical Financial Statement-VARUN BEVERAGES LTD

Years Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 LTM

# Income statement
Sales ₹ 2,502.4 ₹ 3,394.1 ₹ 3,861.2 ₹ 4,003.5 ₹ 5,105.3 ₹ 7,129.6 ₹ 6,450.1 ₹ 8,823.2 ₹ 13,173.1 ₹ 16,042.6 ₹ 18,986.5
Sales Growth - 35.64% 13.76% 3.69% 27.52% 39.65% -9.53% 36.79% 49.30% 21.78% 18.35%

COGS ₹ 1,801.9 ₹ 2,303.3 ₹ 2,470.2 ₹ 2,587.8 ₹ 3,213.8 ₹ 4,555.5 ₹ 4,185.4 ₹ 5,708.4 ₹ 8,447.6 ₹ 9,939.5 ₹ 14,437.9
COGS % Sales 72.01% 67.86% 63.98% 64.64% 62.95% 63.90% 64.89% 64.70% 64.13% 61.96% 76.04%

Gross Profit ₹ 700.51 ₹ 1,090.85 ₹ 1,390.97 ₹ 1,415.77 ₹ 1,891.51 ₹ 2,574.11 ₹ 2,264.77 ₹ 3,114.86 ₹ 4,725.52 ₹ 6,103.07 ₹ 4,548.61
Gross Margin 38.88% 47.36% 56.31% 54.71% 58.86% 56.51% 54.11% 54.57% 55.94% 61.40% 31.50%

SG&A ₹ 313.62 ₹ 448.38 ₹ 581.46 ₹ 577.44 ₹ 855.71 ₹ 1,111.79 ₹ 1,049.81 ₹ 1,420.91 ₹ 1,862.52 ₹ 2,386.33
SG&A Exp % Sales 12.53% 13.21% 15.06% 14.42% 16.76% 15.59% 16.28% 16.10% 14.14% 14.87% 0.00%

EBITDA ₹ 386.89 ₹ 642.47 ₹ 809.51 ₹ 838.33 ₹ 1,035.80 ₹ 1,462.32 ₹ 1,214.96 ₹ 1,693.95 ₹ 2,863.00 ₹ 3,716.74 ₹ 4,593.61
EBITDA margin 15.46% 18.93% 20.97% 20.94% 20.29% 20.51% 18.84% 19.20% 21.73% 23.17% 24.19%

Intrest ₹ 187.36 ₹ 170.15 ₹ 434.74 ₹ 214.59 ₹ 222.80 ₹ 324.31 ₹ 293.74 ₹ 206.97 ₹ 204.09 ₹ 291.60 ₹ 415.05
Intrest % Sales 7.49% 5.01% 11.26% 5.36% 4.36% 4.55% 4.55% 2.35% 1.55% 1.82% 2.19%

Depreciation ₹ 210.06 ₹ 317.41 ₹ 322.21 ₹ 346.64 ₹ 385.07 ₹ 488.63 ₹ 528.70 ₹ 531.26 ₹ 617.19 ₹ 680.91 ₹ 852.58
Depreciation % Sales 11.66% 13.78% 13.04% 13.40% 11.98% 10.73% 12.63% 9.31% 7.31% 6.85% 5.91%

Earning Before Tax (₹ 10.5) ₹ 154.9 ₹ 52.6 ₹ 277.1 ₹ 427.9 ₹ 649.4 ₹ 392.5 ₹ 955.7 ₹ 2,041.7 ₹ 2,744.2 ₹ 3,326.0
EBT % Sales -0.42% 4.56% 1.36% 6.92% 8.38% 9.11% 6.09% 10.83% 15.50% 17.11% 17.52%

Tax ₹ 24.8 ₹ 78.9 ₹ 31.3 ₹ 76.9 ₹ 133.9 ₹ 224.1 ₹ 5.2 ₹ 260.6 ₹ 473.5 ₹ 637.6 ₹ 784.5
Effective Tax Rate -235.61% 50.90% 59.55% 27.75% 31.30% 34.51% 1.33% 27.26% 23.19% 23.23% ₹ 2,541.5

Net Profit (₹ 35.3) ₹ 76.1 ₹ 21.3 ₹ 200.2 ₹ 294.0 ₹ 425.3 ₹ 387.3 ₹ 695.2 ₹ 1,568.2 ₹ 2,106.7 ₹ 2,541.5
Net Margins -1.41% 2.24% 0.55% 5.00% 5.76% 5.97% 6.00% 7.88% 11.90% 13.13% 13.39%

No of Equity Share 225.72 225.72 307.67 308.15 308.21 324.77 324.77 324.78 324.78 324.8 324.8

Earning Per Shares (₹ 0.2) ₹ 0.3 ₹ 0.1 ₹ 0.6 ₹ 1.0 ₹ 1.3 ₹ 1.2 ₹ 2.1 ₹ 4.8 ₹ 6.5 ₹ 7.8
EPS Growth % -315.22% -79.49% 840.21% 46.82% 37.29% -8.94% 79.49% 125.58% 34.33% 20.64%

Dividend Per Shares - - - ₹ 0.1 ₹ 0.1 ₹ 0.2 ₹ 0.2 ₹ 0.3 ₹ 0.7 ₹ 1.0 -
Dividend Payout ratio 0.00% 0.00% 0.00% 22.80% 15.53% 16.97% 18.63% 15.57% 14.50% 15.42%

Retained Earnings 0.00% 100.00% 100.00% 77.20% 84.47% 83.03% 81.37% 84.43% 85.50% 84.58% 100.00%

# Balance Sheet
Equity Share Capital ₹ 133.8 ₹ 133.8 ₹ 182.3 ₹ 182.6 ₹ 182.6 ₹ 288.7 ₹ 288.7 ₹ 433.0 ₹ 649.6 ₹ 649.6
Reserves ₹ 9.3 ₹ 90.5 ₹ 1,511.3 ₹ 1,586.8 ₹ 1,815.9 ₹ 3,039.7 ₹ 3,235.3 ₹ 3,646.9 ₹ 4,452.8 ₹ 6,286.9
Borrowings ₹ 2,615.3 ₹ 2,527.4 ₹ 2,215.4 ₹ 2,653.7 ₹ 2,807.9 ₹ 3,417.2 ₹ 3,216.1 ₹ 3,386.8 ₹ 3,883.8 ₹ 5,431.3
Other Liabilities ₹ 533.3 ₹ 1,679.6 ₹ 915.4 ₹ 852.5 ₹ 1,191.6 ₹ 1,630.0 ₹ 1,707.2 ₹ 2,112.8 ₹ 2,632.1 ₹ 2,819.4
Total Liabilities ₹ 3,291.6 ₹ 4,431.3 ₹ 4,824.4 ₹ 5,275.6 ₹ 5,998.0 ₹ 8,375.6 ₹ 8,447.4 ₹ 9,579.5 ₹ 11,618.2 ₹ 15,187.2

Fixed Assets Net Block ₹ 2,354.9 ₹ 3,495.6 ₹ 3,715.5 ₹ 3,980.5 ₹ 4,387.0 ₹ 6,479.0 ₹ 6,408.6 ₹ 6,310.8 ₹ 6,932.2 ₹ 8,409.2
Capital Work in Progress ₹ 24.8 ₹ 37.9 ₹ 95.6 ₹ 145.4 ₹ 352.4 ₹ 63.8 ₹ 66.8 ₹ 496.6 ₹ 606.6 ₹ 1,922.2
Investments ₹ 303.7 ₹ 3.3 ₹ 6.9 ₹ 8.2 ₹ 11.2 - - - ₹ 0.0 ₹ 21.1
Other Assets ₹ 187.3 ₹ 313.9 ₹ 319.5 ₹ 457.8 ₹ 447.5 ₹ 607.6 ₹ 611.3 ₹ 766.1 ₹ 1,500.9 ₹ 1,864.9
Total Non Currents Assets ₹ 2,870.7 ₹ 3,850.6 ₹ 4,137.4 ₹ 4,592.0 ₹ 5,198.1 ₹ 7,150.4 ₹ 7,086.7 ₹ 7,573.5 ₹ 9,039.7 ₹ 12,217.4

Receivables ₹ 97.3 ₹ 97.9 ₹ 131.4 ₹ 150.3 ₹ 128.0 ₹ 172.6 ₹ 241.8 ₹ 221.3 ₹ 299.3 ₹ 359.4
Inventory ₹ 289.3 ₹ 424.7 ₹ 489.9 ₹ 438.9 ₹ 578.4 ₹ 881.5 ₹ 928.8 ₹ 1,448.1 ₹ 1,993.9 ₹ 2,150.5
Cash & Bank ₹ 34.4 ₹ 58.1 ₹ 65.7 ₹ 94.5 ₹ 93.5 ₹ 171.1 ₹ 190.1 ₹ 336.6 ₹ 285.3 ₹ 459.9
Total Current Assets ₹ 421.0 ₹ 580.6 ₹ 687.0 ₹ 683.6 ₹ 799.9 ₹ 1,225.2 ₹ 1,360.7 ₹ 2,006.0 ₹ 2,578.5 ₹ 2,969.8

Total Assets ₹ 3,291.6 ₹ 4,431.3 ₹ 4,824.4 ₹ 5,275.6 ₹ 5,998.0 ₹ 8,375.6 ₹ 8,447.4 ₹ 9,579.5 ₹ 11,618.2 ₹ 15,187.2

Check TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE
 Historical Financial Statement-VARUN BEVERAGES LTD
Years Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23
#Cash Flow statement
Operating Activity
Profit from operations ₹ 397.0 ₹ 645.0 ₹ 820.0 ₹ 873.0 ₹ 1,123.0 ₹ 1,513.0 ₹ 1,200.0 ₹ 1,624.0 ₹ 2,749.0 ₹ 3,732.0
Receivables (₹ 38.0) - ₹ 7.0 (₹ 34.0) (₹ 13.0) (₹ 32.0) (₹ 76.0) ₹ 15.0 (₹ 123.0) (₹ 73.0)
Inventory (₹ 43.0) (₹ 135.0) (₹ 39.0) ₹ 45.0 (₹ 151.0) (₹ 185.0) (₹ 47.0) (₹ 519.0) (₹ 557.0) (₹ 160.0)
Payables ₹ 86.0 ₹ 149.0 - - - - - - - -
Loans Advances ₹ 39.0 (₹ 56.0) - - - - - - - -
Other WC items - - ₹ 95.0 (₹ 207.0) ₹ 114.0 ₹ 132.0 ₹ 12.0 ₹ 236.0 ₹ 95.0 (₹ 440.0)
Working capital changes ₹ 44.0 (₹ 42.0) ₹ 64.0 (₹ 197.0) (₹ 50.0) (₹ 85.0) (₹ 111.0) (₹ 269.0) (₹ 585.0) (₹ 673.0)
Direct taxes (₹ 11.0) (₹ 48.0) (₹ 58.0) (₹ 57.0) (₹ 73.0) (₹ 120.0) (₹ 78.0) (₹ 124.0) (₹ 373.0) (₹ 668.0)
Cash from Operating Activity ₹ 430.0 ₹ 555.0 ₹ 826.0 ₹ 619.0 ₹ 1,000.0 ₹ 1,308.0 ₹ 1,011.0 ₹ 1,231.0 ₹ 1,791.0 ₹ 2,391.0

Investing Activity
Fixed assets purchased (₹ 220.0) (₹ 269.0) (₹ 792.0) (₹ 533.0) (₹ 859.0) (₹ 754.0) (₹ 560.0) (₹ 835.0) (₹ 1,801.0) (₹ 3,264.0)
Fixed assets sold - ₹ 4.0 ₹ 12.0 ₹ 17.0 ₹ 50.0 ₹ 21.0 ₹ 24.0 ₹ 19.0 ₹ 51.0 ₹ 70.0
Investments purchased (₹ 302.0) (₹ 550.0) (₹ 35.0) (₹ 35.0) - (₹ 73.0) - - - -
Investments sold ₹ 8.0 ₹ 512.0 ₹ 35.0 ₹ 35.0 - ₹ 73.0 - - - -
Interest received ₹ 12.0 ₹ 6.0 ₹ 8.0 ₹ 5.0 ₹ 6.0 ₹ 5.0 ₹ 9.0 ₹ 13.0 ₹ 23.0 ₹ 22.0
Dividends received ₹ 2.0 - - - - - - - - -
Investment in group cos - - - - - - - - - (₹ 22.0)
Acquisition of companies - - (₹ 276.0) (₹ 212.0) - (₹ 8.0) - - - (₹ 10.0)
Other investing items - (₹ 4.0) - (₹ 23.0) (₹ 134.0) (₹ 1,583.0) ₹ 55.0 (₹ 205.0) (₹ 42.0) (₹ 85.0)
Cash from Investing Activity (₹ 500.0) (₹ 301.0) (₹ 1,048.0) (₹ 746.0) (₹ 937.0) (₹ 2,319.0) (₹ 472.0) (₹ 1,008.0) (₹ 1,769.0) (₹ 3,289.0)

Financing Activity
Proceeds from shares ₹ 240.0 - ₹ 701.0 ₹ 4.0 ₹ 1.0 ₹ 900.0 - - - ₹ 4.0
Proceeds from debentures - ₹ 320.0 ₹ 180.0 ₹ 300.0 - - - - - -
Redemption of debentures - - (₹ 500.0) - (₹ 300.0) - - - - -
Proceeds from borrowings ₹ 171.0 ₹ 332.0 - - ₹ 1,400.0 ₹ 1,958.0 ₹ 1,020.0 ₹ 855.0 ₹ 1,478.0 ₹ 2,783.0
Repayment of borrowings (₹ 87.0) (₹ 997.0) ₹ 71.0 (₹ 57.0) (₹ 644.0) (₹ 1,310.0) (₹ 1,233.0) (₹ 726.0) (₹ 1,138.0) (₹ 1,277.0)
Interest paid fin (₹ 186.0) (₹ 141.0) (₹ 219.0) (₹ 156.0) (₹ 189.0) (₹ 303.0) (₹ 277.0) (₹ 179.0) (₹ 172.0) (₹ 269.0)
Dividends paid - - - (₹ 46.0) (₹ 46.0) (₹ 69.0) (₹ 72.0) (₹ 108.0) (₹ 162.0) (₹ 227.0)
Financial liabilities - - - - - - (₹ 11.0) (₹ 19.0) (₹ 23.0) (₹ 30.0)
Share application money - - - - - - - - - -
Application money refund - - (₹ 21.0) - - - - - - -
Other financing items (₹ 80.0) ₹ 250.0 ₹ 17.0 ₹ 113.0 (₹ 308.0) (₹ 69.0) - - - -
Cash from Financing Activity ₹ 58.0 (₹ 236.0) ₹ 229.0 ₹ 158.0 (₹ 86.0) ₹ 1,107.0 (₹ 573.0) (₹ 177.0) (₹ 17.0) ₹ 984.0

Net Cash Flow (₹ 12.0) ₹ 18.0 ₹ 7.0 ₹ 31.0 (₹ 23.0) ₹ 96.0 (₹ 34.0) ₹ 46.0 ₹ 5.0 ₹ 86.0
 VARUN BEVERAGES LTD
( NSE: VBL | BSE: 540180 )

Ratio Analysis -VARUN BEVERAGES LTD

Years Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Trend Mean Median

Sales Growth 35.64% 13.76% 3.69% 27.52% 39.65% -9.53% 36.79% 49.30% 21.78% 24.29% 27.52%
EBITDA Growth 66.06% 26.00% 3.56% 23.56% 41.18% -16.92% 39.42% 69.01% 29.82% 31.30% 29.82%
EBIT Growth -1571.1% -66.07% 427.21% 54.43% 51.75% -39.55% 143.48% 113.63% 34.41% -94.65% 51.75%
Net Profit Growth -315.22% -72.05% 841.67% 46.85% 44.66% -8.94% 79.50% 125.58% 34.34% 86.27% 44.66%
Dividend Growth 0.00% 0.00% 0.00% 0.00% 50.00% 0.00% 50.00% 109.99% 42.86% 28.10% 0.00%

Gross Margin 38.88% 47.36% 56.31% 54.71% 58.86% 56.51% 54.11% 54.57% 55.94% 61.40% 53.86% 55.32%
EBITDA Margin 15.46% 18.93% 20.97% 20.94% 20.29% 20.51% 18.84% 19.20% 21.73% 23.17% 20.00% 20.40%
EBIT Margin 7.07% 9.58% 12.62% 12.28% 12.75% 13.66% 10.64% 13.18% 17.05% 18.92% 12.77% 12.68%
EBT Margin -0.42% 4.56% 1.36% 6.92% 8.38% 9.11% 6.09% 10.83% 15.50% 17.11% 7.94% 7.65%
Net Profit Margin -1.41% 2.24% 0.55% 5.00% 5.76% 5.97% 6.00% 7.88% 11.90% 13.13% 5.70% 5.86%

SalesExpenses %Sales 12.5% 13.2% 15.1% 14.4% 16.8% 15.6% 16.3% 16.1% 14.1% 14.9% 14.90% 14.97%
Depreciation % Sales 11.7% 13.8% 13.0% 13.4% 12.0% 10.7% 12.6% 9.3% 7.3% 6.9% 11.07% 11.82%
Operating Income % Sales 7.07% 9.58% 12.62% 12.28% 12.75% 13.66% 10.64% 13.18% 17.05% 18.92% 12.77% 12.68%

Return On Capital Employed 6.41% 11.81% 12.47% 11.12% 13.54% 14.43% 10.18% 15.57% 24.99% 24.55% 14.51% 13.00%
Retained Earnings % 0.00% 100.00% 100.00% 77.20% 84.47% 83.03% 81.37% 84.43% 85.50% 84.58% 78.06% 84.45%
Return on Equity% -24.70% 33.91% 1.26% 11.31% 14.71% 12.78% 10.99% 17.04% 30.73% 30.37% 13.84% 13.74%
Self Sustained Growth Rate 0.0% 33.9% 1.3% 8.7% 12.4% 10.6% 8.9% 14.4% 26.3% 25.7% 14.22% 11.52%
Intrest Coverage Ratio 0.94x 1.91x 1.12x 2.29x 2.92x 3.00x 2.34x 5.62x 11.00x 10.41x 415.58% 262.85%

Debtor Turnover Ratio 25.72x 34.67x 29.40x 26.65x 39.88x 41.32x 26.68x 39.88x 44.01x 44.64x 35.28x 37.27x
Creditor Turnover Ratio 4.69x 2.02x 4.22x 4.70x 4.28x 4.37x 3.78x 4.18x 5.00x 5.69x 4.29x 4.33x
Investor Turnover Ratio 8.65x 7.99x 7.88x 9.12x 8.83x 8.09x 6.94x 6.09x 6.61x 7.46x 7.77x 7.94x
Fixed Asset Turnover 1.06x 0.97x 1.04x 1.01x 1.16x 1.10x 1.01x 1.40x 1.90x 1.91x 1.26x 1.08x
Capitsl Turnover Ratio 17.49x 15.13x 2.28x 2.26x 2.55x 2.14x 1.83x 2.16x 2.58x 2.31x 5.07x 2.30x

(In Days)
Debtor Days 14 11 12 14 9 9 14 9 8 8 11 10
Payable Days 78 181 87 78 85 83 97 87 73 64 91 84
Inventoty Days 42 46 46 40 41 45 53 60 55 49 48 46
Cash Conversion Cycle -21 -124 -28 -24 -35 -29 -30 -18 -9 -7 -33 -26

CFO/Sales 17.18% 16.35% 21.39% 15.46% 19.59% 18.35% 15.67% 13.95% 13.60% 14.90% 16.64% 16.01%
CFO/Total Assets 13.06% 12.52% 17.12% 11.73% 16.67% 15.62% 11.97% 12.85% 15.42% 15.74% 14.27% 14.24%
Cfo/Total Debt 16.44% 21.96% 37.28% 23.33% 35.61% 38.28% 31.44% 36.35% 46.11% 44.02% 33.08% 35.98%
 VARUN BEVERAGES LTD
( NSE: VBL | BSE: 540180 )
Common Size Statement -VARUN BEVERAGES LTD

Particulars Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23

Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Raw Material Cost 54.98% 51.43% 45.83% 47.04% 45.18% 47.17% 43.12% 46.86% 50.14% 46.68%
Change in Inventory -0.01% 0.85% 0.83% 1.83% 1.22% 2.02% 0.27% 1.13% 2.62% 0.53%
Power and Fuel 4.54% 3.86% 4.05% 4.00% 3.82% 3.91% 4.14% 3.74% 3.64% 3.43%
Other Mfr. Exp 3.81% 3.88% 4.01% 3.86% 3.75% 3.44% 4.10% 3.72% 3.58% 3.35%
Employee Cost 8.66% 9.54% 10.92% 11.57% 11.42% 11.38% 13.80% 11.51% 9.38% 9.02%
Selling and admin 11.92% 12.54% 14.06% 13.14% 33.16% 33.24% 32.43% 15.40% 13.49% 14.05%
Other Expenses 0.61% 0.67% 1.00% 1.29% -16.40% -17.65% -16.15% 0.70% 0.65% 0.83%
Other Income 0.57% 1.05% 0.69% 0.35% 0.11% 0.66% -0.47% 0.58% -0.14% -0.03%
Depreciation 8.39% 9.35% 8.34% 8.66% 7.54% 6.85% 8.20% 6.02% 4.69% 4.24%
Interest 7.49% 5.01% 11.26% 5.36% 4.36% 4.55% 4.55% 2.35% 1.55% 1.82%
Profit before tax 0.15% 5.62% 2.05% 7.27% 8.50% 9.77% 5.62% 11.41% 15.36% 17.08%
Tax 0.99% 2.32% 0.81% 1.92% 2.62% 3.14% 0.08% 2.95% 3.59% 3.97%
Net profit -0.81% 3.33% 1.10% 5.25% 5.74% 6.58% 5.10% 7.87% 11.37% 12.82%
Dividend Amount 0.00% 0.00% 0.00% 1.14% 0.89% 1.01% 1.12% 1.23% 1.73% 2.02%
EBITDA 16.07% 20.02% 21.51% 21.19% 20.27% 21.12% 17.93% 19.19% 21.20% 22.85%

Common Size Balance Sheet -VARUN BEVERAGES LTD

Particulars Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24

Total Liablilities 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Equity Share Capital 4.06% 3.02% 3.78% 3.46% 3.05% 3.45% 3.42% 4.52% 5.59% 4.28%
Reserves 0.28% 2.04% 31.33% 30.08% 30.27% 36.29% 38.30% 38.07% 38.33% 41.40%
Borrowings 79.45% 57.03% 45.92% 50.30% 46.81% 40.80% 38.07% 35.35% 33.43% 35.76%
Other Liabilities 16.20% 37.90% 18.97% 16.16% 19.87% 19.46% 20.21% 22.06% 22.65% 18.56%

Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Net Block 71.54% 78.88% 77.01% 75.45% 73.14% 77.36% 75.87% 65.88% 59.67% 55.37%
Capital Work in Progress 0.75% 0.86% 1.98% 2.76% 5.87% 0.76% 0.79% 5.18% 5.22% 12.66%
Investments 9.23% 0.07% 0.14% 0.16% 0.19% 0.00% 0.00% 0.00% 0.00% 0.14%
Other Assets 5.69% 7.08% 6.62% 8.68% 7.46% 7.25% 7.24% 8.00% 12.92% 12.28%
Receivables 2.96% 2.21% 2.72% 2.85% 2.13% 2.06% 2.86% 2.31% 2.58% 2.37%
Inventory 8.79% 9.58% 10.16% 8.32% 9.64% 10.52% 11.00% 15.12% 17.16% 14.16%
Cash & Bank 1.05% 1.31% 1.36% 1.79% 1.56% 2.04% 2.25% 3.51% 2.46% 3.03%
 VARUN BEVERAGES LTD
( NSE: VBL | BSE: 540180 )

Forcasting
VARUN BEVERAGES LTD - Sales Forecasting VARUN BEVERAGES LTD - EBITDA Forecasting
Year Weight Year Sales Sales Growth Year Weight Year EBITDA EBITDA Growth
1 2014A 2,502.4 1 2014A 402.1
2 2015A 3,394.1 35.64% 2 2015A 679.5 68.99%
3 2016A 3,861.2 13.76% 3 2016A 830.6 22.25%
4 2017A 4,003.5 3.69% 4 2017A 848.3 2.12%
5 2018A 5,105.3 27.52% 5 2018A 1,034.6 21.97%
6 2019A 7,129.6 39.65% 6 2019A 1,506.0 45.56%
7 2020A 6,450.1 -9.53% 7 2020A 1,156.7 -23.20%
8 2021A 8,823.2 36.79% 8 2021A 1,692.8 46.35%
9 2022A 13,173.1 49.30% 9 2022A 2,792.2 64.95%
10 2023A 16,042.6 21.78% 10 2023A 3,666.0 31.29%
11 2024E 14,531.5 -9.42% 11 2024E 3,123.3 -14.80%
12 2025E 15,892.0 9.36% 12 2025E 3,425.5 9.68%
13 2026E 17,252.6 8.56% 13 2026E 3,727.8 8.82%
14 2027E 18,613.1 7.89% 14 2027E 4,030.1 8.11%
15 2028E 19,973.6 7.31% 15 2028E 4,332.3 7.50%

Sales Foresting EBITDA Forecast

25,000.0 0.6 5,000.0 0.8
0.5 4,500.0
20,000.0 4,000.0 0.6
0.4
3,500.0 0.4
15,000.0 0.3 3,000.0
0.2 2,500.0 0.2
10,000.0 0.1 2,000.0
1,500.0 0
0
5,000.0 1,000.0
-0.1 -0.2
500.0
0.0 -0.2 0.0 -0.4
2016A
2014A
2015A

2017A
2018A
2019A
2020A
2021A
2022A
2023A
2024A
2025A
2026A
2027A
2028A

2014A
2015A
2016A
2017A
2018A
2019A
2020A
2021A
2022A
2023A
2024A
2025A
2026A
2027A
2028A
Sales Sales Growth EBITDA EBITDA Growth

VARUN BEVERAGES LTD - Earning Per Shares Forecasting VARUN BEVERAGES LTD - Earning Before Tax
Year Weight Year EPS EPS Growth Year Weight Year EBT EPS Growth
1 2014A -0.2 1 2014A -10.5
2 2015A 0.3 -315.22% 2 2015A 154.9 -1571.13%
3 2016A 0.1 -79.49% 3 2016A 52.6 -66.07%
4 2017A 0.6 840.21% 4 2017A 277.1 427.21%
5 2018A 1.0 46.82% 5 2018A 427.9 54.43%
6 2019A 1.3 37.29% 6 2019A 649.4 51.75%
7 2020A 1.2 -8.94% 7 2020A 392.5 -39.55%
8 2021A 2.1 79.49% 8 2021A 955.7 143.48%
9 2022A 4.8 125.58% 9 2022A 2,041.7 113.63%
10 2023A 6.5 34.33% 10 2023A 2,744.2 34.41%
11 2024E 5.2 -19.32% 11 2024A 2,204.7 -19.66%
12 2025E 5.9 11.99% 12 2025A 2,465.8 11.84%
13 2026E 6.5 10.71% 13 2026A 2,726.9 10.59%
14 2027E 7.1 9.67% 14 2027A 2,988.0 9.58%
15 2028E 7.7 8.82% 15 2028A 3,249.1 8.74%

EPS Forecasting EBT Forecasting

4,000.0 10
10.0
3,000.0 5
0
5.0 2,000.0
-5
1,000.0
-10
0.0 0.0 -15
2023A
2014A
2015A
2016A
2017A
2018A
2019A
2020A
2021A
2022A

2024A
2025A
2026A
2027A
2028A

2014A
2015A
2016A
2017A
2018A
2019A
2020A
2021A
2022A
2023A
2024A
2025A
2026A
2027A
2028A

-1,000.0 -20
-5.0
EBT EPS Growth
EPS EPS Growth
 VARUN BEVERAGES LTD
( NSE: VBL | BSE: 540180 )

Weighted Average Cost Of Capital

All Figures are in INR unless Stated otherwise

Peer Comps
Debt/ Debt/ Leverred Unlevered
1 2
Name Of the Comps Country Total Debt Total equity Tax Rate Equity Capital Beta Beta 3

Vaun Beverage India 6,760.9 1,98,559.2 30.00% 3.40% 3.29% 0.80 0.78
Hatsun Agro Product India 2,698.3 23,636.9 30.00% 11.42% 10.25% 0.2 0.19
Bector Food India 245.0 10,420.0 30.00% 2.35% 2.30% 0.7 0.69
Zydus Wellness India 328.7 11,448.4 30.00% 2.87% 2.79% 0.5 0.49
Britannia Industries India 2,065.0 1,36,558.0 30.00% 1.51% 1.49% 0.80 0.79

Average 30.00% 4.31% 4.02% 0.60 0.59

Median 30.00% 2.87% 2.79% 0.7 0.69

Cost Of Debt Cost of Equity

Pre-Tax Cost of Debt 6.14% Risk Free Rate 6.95%

Tax Rate 30% Equity Risk Premium 8.66%
Post Tax Cost Of Debt 4.30% Levered Beta 4 0.89
Cost of Equity 14.63%

Capital Structure Levered Beta

Current Target Comps Merdian Unlevered Beta 0.69

Total Debt 6,760.9 3.29% 4.02% Taerget/Equity 4.19%
Market Capitalization 1,98,559.2 96.71% 95.98% Tax Rate 30.00%
Total Capital 2,05,320.1 100.00% 100.00% Levered Beta 0.89

Debt/Equity 3.40% 4.19%

Weighted Average Cost of Capital
Notes:-
1. Tax Rate Considered asa Marginal Tax Rate For The Country Cost of Equity 14.63%
2. Levered beta is Basedon 5 years Monthly Data Equity Weight 95.98%
3. Unlevered Beta = Levered Beta/(1+(1-Tax rate)*Debt/Equity)
4. levered Beta = Levered Beta*(1+(1-Tax rate)*Debt/Equity) Cost of Debt 4.30%
Debt Weight 4.02%

WACC 14.21%
Beta-Regression'!A1

VARUN BEVERAGES LTD

( NSE: VBL | BSE: 540180 )

Regression Beta

VARUN BEVERAGES LTD Weekly Return Nifty Weekly Returns Beta Drifting

Date Closing Price Return Closing Price Return Levered Raw Beta 0.80
23-10-2022 208.0 17,786.8 Raw Beta Weight 75.00% Beta 1 0.80
30-10-2022 227.8 9.50% 18,117.2 1.86% Beta 2 0.80
06-11-2022 221.3 -2.85% 18,349.7 1.28% Market Beta 1.00
13-11-2022 228.8 3.39% 18,307.7 -0.23% Market Beta Weight 25.00% Beta 3 0.80
20-11-2022 230.4 0.70% 18,512.8 1.12%
27-11-2022 263.7 14.47% 18,696.1 0.99% Adjusted Beta 0.85
04-12-2022 282.1 6.95% 18,496.6 -1.07%
11-12-2022 279.3 -0.96% 18,269.0 -1.23%
18-12-2022 257.5 -7.81% 17,806.8 -2.53%
25-12-2022 264.5 2.71% 18,105.3 1.68%
01-01-2023 260.2 -1.64% 17,859.5 -1.36%
08-01-2023 227.2 -12.70% 17,956.6 0.54% SUMMARY OUTPUT
15-01-2023 246.5 8.53% 18,027.7 0.40%
22-01-2023 248.5 0.80% 17,604.4 -2.35% Regression Statistics
29-01-2023 231.0 -7.05% 17,854.1 1.42% Multiple R 0.252845
05-02-2023 254.4 10.12% 17,856.5 0.01% R Square 0.063931
12-02-2023 256.6 0.90% 17,944.2 0.49% Adjusted R Square 0.054753
19-02-2023 258.3 0.65% 17,465.8 -2.67% Standard Error 0.045569
26-02-2023 271.7 5.18% 17,594.4 0.74% Observations 104
05-03-2023 268.8 -1.08% 17,412.9 -1.03%
12-03-2023 263.2 -2.05% 17,100.1 -1.80% ANOVA
19-03-2023 270.4 2.72% 16,945.1 -0.91% df SS MS F Significance F
26-03-2023 277.4 2.59% 17,359.8 2.45% Regression 1 0.014466 0.014466 6.966271 0.009609337
02-04-2023 278.7 0.47% 17,599.2 1.38% Residual 102 0.211808 0.002077
09-04-2023 285.9 2.59% 17,828.0 1.30% Total 103 0.226274
16-04-2023 279.4 -2.26% 17,624.1 -1.14%
23-04-2023 289.0 3.44% 18,065.0 2.50% Coefficients
Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
30-04-2023 290.5 0.51% 18,069.0 0.02% Intercept 0.009047 0.004564 1.982361 0.050129 -5.17467E-06 0.018099 -5.17467E-06 0.018099
07-05-2023 311.2 7.11% 18,314.8 1.36% X Variable 1 0.798045 0.302362 2.639369 0.009609 0.198311388 1.397778 0.198311388 1.397778
14-05-2023 317.5 2.03% 18,203.4 -0.61%
21-05-2023 340.4 7.21% 18,499.4 1.63%
28-05-2023 339.0 -0.40% 18,534.1 0.19%
04-06-2023 318.3 -6.12% 18,563.4 0.16%
11-06-2023 328.5 3.21% 18,826.0 1.41%
18-06-2023 306.4 -6.72% 18,665.5 -0.85%
25-06-2023 321.0 4.76% 19,189.1 2.80%
02-07-2023 328.5 2.32% 19,331.8 0.74%
09-07-2023 333.1 1.42% 19,564.5 1.20%
16-07-2023 320.1 -3.92% 19,745.0 0.92%
 VARUN BEVERAGES LTD
( NSE: VBL | BSE: 540180 )

Returns On Markets

Year Annual Average Return 15.61%

1
2000 -14.65% Dividend Yield 1.25%
2001 -16.18%
2002 3.25% Total Market Return 15.61%
2003 71.90%
2004 10.68%
2005 36.34%
2006 39.83%
2007 54.77%
2008 -51.79%
2009 75.76%
2010 17.95%
2011 -24.62%
2012 27.70%
2013 6.76%
2014 31.39%
2015 -4.06%
2016 3.01%
2017 28.65%
2018 3.15%
2019 12.02%
2020 14.90%
2021 24.12%
2022 4.32%
2023 19.42%
 VARUN BEVERAGES LTD
( NSE: VBL | BSE: 540180 )
Calculation of ROIC Dec-19 Dec-20 Dec-21 Dec-22 Dec-23

Current Assets
Inventories 882.0 929.0 1,448.0 1,994.0 2,151.0
Trade receivables 173.0 242.0 221.0 299.0 359.0
Loans n Advances 9.0 6.0 8.0 20.0 21.0
Other asset items 599.0 605.0 758.0 1,481.0 1,844.0
Total Current Assets 1,663.0 1,782.0 2,435.0 3,794.0 4,375.0

Current Liabilities
Trade Payables 478.0 511.0 712.0 824.0 758.0
Advance from Customers 113.0 173.0 79.0 203.0 180.0
Other liability items 1,009.0 958.0 1,205.0 1,491.0 1,732.0
Total Current Liabilities 1,600.0 1,642.0 1,996.0 2,518.0 2,670.0

# Net Working Capital 63.0 140.0 439.0 1,276.0 1,705.0

Non- Current Assets

Land 1,209.0 1,250.0 1,296.0 1,679.0 1,832.0
Building 1,308.0 1,392.0 1,474.0 1,587.0 1,958.0
Plant Machinery 3,565.0 3,831.0 3,967.0 4,401.0 5,499.0
Equipments 1,194.0 1,212.0 1,242.0 1,238.0 1,293.0
Computers 23.0 25.0 28.0 33.0 41.0
Furniture n fittings 25.0 26.0 29.0 29.0 41.0
Vehicles 742.0 622.0 690.0 795.0 1,086.0
Intangible Assets 644.0 644.0 644.0 644.0 644.0
Other fixed assets 35.0 32.0 38.0 35.0 51.0
Gross Block 8,745.0 9,034.0 9,408.0 10,441.0 12,445.0
Accumulated Depreciation (₹ 2,265.0) (₹ 2,624.0) (₹ 3,099.0) (₹ 3,509.0) (₹ 4,036.0)
# Net Non Current Assets 6,480.0 6,410.0 6,309.0 6,932.0 8,409.0

# Invested Capital 6,543.0 6,550.0 6,748.0 8,208.0 10,114.0

EBIT 973.7 686.3 1,162.7 2,245.8 3,035.8

# ROIC 14.88% 10.48% 17.23% 27.36% 30.02%

Calculation of Reinvestment Rate Dec-19 Dec-20 Dec-21 Dec-22 Dec-23

Net Capex 733.0 536.0 816.0 1,750.0 3,194.0

Change in Working Capital 77.0 299.0 837.0 429.0

EBIT 973.7 686.3 1,162.7 2,245.8 3,035.8

Marginal Tax Rate 25.00% 25.00% 25.00% 25.00% 25.00%
EBIT(1-T) 730.3 514.7 872.0 1,684.4 2,276.9

Reinvestment 613.0 1,115.0 2,587.0 3,623.0

Reinvestment Rate 119.10% 127.86% 153.59% 159.12%

4 Year Average 139.92%

4 Year Median 140.73%

# Calculation of Reinvestment Rate Dec-19 Dec-20 Dec-21 Dec-22 Dec-23

Reinvestment Rate 119.10% 127.86% 153.59% 159.12%

ROIC 14.88% 10.48% 17.23% 27.36% 30.02%
Intrinsic Growth 12.48% 22.03% 42.02% 47.76%

4 Year Average 31.07%

4 Year Median 32.03%
 VARUN BEVERAGES LTD
( NSE: VBL | BSE: 540180 )

Calculation of PV of FCFF Dec-23A Nov-24F Nov-25F Nov-26F Mar-28F Mar-29F

EBIT 3,035.83 3,643.00 4,371.60 5,245.91 6,295.10 7,554.12

Tax Rate 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
EBIT(1-T) 2,276.87 2,732.25 3,278.70 3,934.44 4,721.32 5,665.59
Less:- Reinvestment Rate 140.73% 115.97% 91.21% 66.45% 41.69% 41.69%
Free Cash Flow to Firm (FCFF) -927.30 -436.28 288.25 1,320.03 2,753.00 3,303.60
Mid year Convention 0.5 1.5 2.5 3.5 4.5
Discounting Factor 0.936 0.819 0.717 0.628 0.550

PV of FCFF -408.23 236.16 946.91 1,729.10 1,816.74

Expected Growth 20.00%

Terminal Growth 6.33%
WACC 14.21%

Calculation of Terminal Value

FCFF (n+1) 3,964.32

WACC 14.21%
Terminal Growth Rate 6.33%

Terminal Value 50,298.34

Calculation of Equity Value per share

Pv of FCFF 4,320.67
PV of Terminal Value 27,660.33
Value of operating Assets/EV 31,981.00

Add- Cash 460

Less- Debt 2,242
Value of Equity 30,198.86
No. of Shares 324.87
Equity Value Per Share 92.96

Share Price 611

Discount/Premium 5.6x
 Sensitivity Analysis

Selected Inputs Enterprise Value

Sensitivity Analysis
Terminal Growth Rate 7.2% 31,981.00 12% 14.21% 19% 21%
WACC 14.2% 4% 34,418.3 25,674.7 15,765.8 13,343.1
Net Debt (End of ) 2,242.0 3% 31,111.9 23,769.8 15,010.7 12,793.7
Shares Outstanding (Crs) 2,242.0 5% 38,669.4 27,993.2 16,628.7 13,961.2
Current Stock Price (₹/sh) 611.00 6.33% 46,646.8 31,988.7 17,987.5 14,913.9
7% 52,272.9 34,559.8 18,786.1 15,462.4

Equity Value Equity Value per Share

12% 14.21% 19% 21% 92.96 12% 14.21% 19% 21%

4% 32,176.3 23,432.7 13,523.8 11,101.1 4% 100.46 73.55 43.04 35.59
3% 28,869.9 21,527.8 12,768.7 10,551.7 3% 90.28 67.68 40.72 33.90
5% 36,427.4 25,751.2 14,386.7 11,719.2 5% 113.55 80.68 45.70 37.49
6.33% 44,404.8 29,746.7 15,745.5 12,671.9 6.33% 138.10 92.98 49.88 40.42
7% 50,030.9 32,317.8 16,544.1 13,220.4 7% 155.42 100.90 52.34 42.11
 VARUN BEVERAGES LTD
( NSE: VBL | BSE: 540180 )
Amount In Crores
Comparable Company Valuation
Market Data Financials Valuation

Share Share Equity Enterprise

Company Ticker Price Outstanding Value Net Debt Value Revenue EBITDA Net income EV/Revenue EV/Ebitda P/E
Varun Beverages 611 324.87 1,98,561 6,476 2,05,036 18,987 4,635 2,582 10.8x 44.2x 76.9x
Hatsun Agro 1,061 22.27 23,632 2,656 26,288 8,215 1,014 318 3.2x 25.9x 74.4x
Bikaji Foods 866 25.04 21,688 84 21,773 2,494 471 298 8.7x 46.3x 72.8x
L T Foods 351 34.73 12,185 1,167 13,352 8,195 1,065 609 1.6x 12.5x 20.0x
Zydus Wellness 1,799 6.36 11,443 291 11,733 2,467 364 304 4.8x 32.3x 37.6x
Mrs Bectors 1,697 6.14 10,420 170 10,590 1,689 268 141 6.3x 39.5x 73.9x
KRBL 268 22.89 6,124 497 6,621 5,169 760 488 1.3x 8.7x 12.6x

High 10.8x 46.3x 76.9x

75 Percentile 7.5x 41.9x 74.2x
Average 5.2x 29.9x 52.6x
Median 4.8x 32.3x 72.8x
25 Percentile 2.4x 19.2x 28.8x
Low 1.3x 8.7x 12.6x

Varun Beverages Comparable Valuation EV/Revenue EV/Ebitda P/E

Implied Enterprise Value 90,312 1,49,596 1,94,529
Net Debt 6,476 6,476 6,476
Implied Market Value 83,836 1,43,120 1,88,053
Shares Outstanding 324.87 324.87 324.87
Implied Value per Share 258.1 440.5 578.9
Analysis Over Valued Over ValuedOver Valued
Source:-Screener
 VARUN BEVERAGES LTD
( NSE: VBL | BSE: 540180 )

Football Field Analysis

Football Field Analysis - Valuation Summary (Rs) ₹ 681.12

700

₹ 578.90
600

500

400

300
₹ 331.26

200 ₹ 258.10 ₹ 155.42

₹ 100.89
100 ₹ 42.11
₹ 100.46
₹ 73.55
0 ₹ 35.59
Comps DCF Bear DCF Base DCF Bull 52W H/L
 VARUN BEVERAGES LTD
( NSE: MSUMI | BSE: 543498 )
Value at Risk- Historical Approch( Varun Beverage)

Date Price Return Sorted Return Calculation Of VAR

27-11-2020 77.46 0.241545 0.120659722 Mean 0.18%
05-11-2019 62.39 -0.75039 0.110537558 Std Deviation 2.22%
30-11-2022 249.95 -0.57636 0.090389565 Min -9.16%
08-10-2024 590.00 6.870864 0.088460474 Max 12.07%
07-02-2020 74.96 -0.38987 0.086376812 CMP 603.8
01-11-2021 122.86 2.581924 0.084856512
21-12-2017 34.30 -0.23094 0.080655325
31-07-2018 44.60 -0.33552 0.079119284 Percentile Confidence VAR Stock Price VAR(INR)
06-11-2019 67.12 0.160643 0.075813432 5% 95.0% -3.17% 622.94 -19.14
20-04-2020 57.83 -0.00121 0.075106897 1% 99.0% -5.38% 636.26 -32.46
22-04-2020 57.90 -0.56788 0.072818232 0.5% 99.5% -6.50% 643.07 -39.27
08-11-2021 133.99 2.571162 0.072520612 10% 90.0% -2.32% 617.83 -14.03
28-12-2017 37.52 -0.09851 0.071693802
02-01-2018 41.62 -0.13364 0.071575695
30-10-2018 48.04 -0.767 0.070887205
24-08-2022 206.18 -0.58876 0.069897774
20-12-2023 501.36 6.975819 0.069773396
18-06-2020 62.86 -0.72503 0.068684121
04-10-2022 228.61 3.308519 0.068071389
26-03-2020 53.06 -0.79656 0.068035427
07-02-2023 260.82 -0.18818 0.067315955
10-05-2023 321.28 5.255452 0.067056362
29-03-2019 51.36 -0.74416 0.066223791
04-08-2022 200.75 2.907162 0.064873753
09-04-2020 51.38 -0.48682 0.064649814
07-06-2021 100.12 0.794265 0.064426962
13-09-2019 55.80 -0.76892 0.064073227
16-01-2023 241.47 7.511456 0.063042043
13-04-2017 28.37 -0.95298 0.061751497
19-08-2024 603.36 13.08732 0.0608714
04-05-2018 42.83 -0.50577 0.060410993
16-12-2020 86.66 -0.60384 0.060320568
06-09-2022 218.75 2.728481 0.058399458
13-05-2020 58.67 -0.75991 0.058261183
06-02-2023 244.37 -0.61134 0.057970387
23-10-2024 628.75 0.052125 0.057522496
05-06-2024 597.60 0.621358 0.057025612
27-10-2023 368.58 3.130674 0.056163677
03-05-2021 89.23 -0.59697 0.056101314
01-11-2022 221.40 2.799554 0.055240456
26-07-2019 58.27 -0.1684 0.055042549
06-08-2020 70.07 -0.70534 0.054794521
03-11-2022 237.80 0.83516 0.054545455
12-11-2021 129.58 4.399167 0.05452474
31-03-2017 24.00 -0.8069 0.054481547
25-02-2022 124.29 0.671238 0.05375159
23-01-2020 74.37 -0.49051 0.052952003
25-04-2022 145.97 1.098175 0.052794807
11-03-2020 69.57 0.736212 0.05265547
19-01-2018 40.07 -0.56025 0.052534804
22-02-2021 91.12 3.106354 0.052437052
20-03-2017 22.19 -0.93481 0.052157421
26-05-2023 340.39 5.360052 0.052112633
 VARUN BEVERAGES LTD
(VBL | BSE Code: 540180)
INR 597.75
52 Week (High - INR 686 & Low - 370)

About the company

Varun Beverages Ltd has been associated with PepsiCo since the 1990s and is a key player in beverage industry
and one of the largest franchisee of PepsiCo in the world. The company produces and distributes a wide range of
carbonated soft drinks, non-carbonated drinks and packaged water sold under trademarks owned by
PepsiCo.PepsiCo brands produced and sold by the company include Pepsi, Seven-up, Mirinda Orange, Mountain
Dew, Tropicana Juices and many more.

Financial Summary
Revenues (INR Crs.) Net Profit (INR Crs.) Average Total Assets (INR Crs.)
13,403
16,043 2,056
10,599
13,173
1,497 8,411 9,013
8,823
6,450
694
329

2020 2021 2022 2023 2020 2021 2022 2023 2020 2021 2022 2023

Return on Equity (%) Return on Asset (%) Financial Leverage

34.15% 2.46x
32.62%
15.34%
14.13% 2.37x
2.31x
18.26%
7.70%
2.23x
9.60%
3.91%

2020 2021 2022 2023 2020 2021 2022 2023 2020 2021 2022 2023

Recent Updates

• Varun Beverages has plans to raise Rs 7,500 crore from the market through Qualified Institutions
Placement (QIP)
• The Relative Strength Index of the stock stood at 35.64 on 8 Oct 2024.
• The company saw a revenue growth of 28.3% in the June quarter of 2024, reaching ₹7,196.86 crore
• Their profit increased by 25.5%, showing strong performance
• In late 2023, Varun Beverages expanded its African footprint by acquiring the South African -based
Beverage Company (Bevco) for ₹1,320 crore
• The company went for a 1:5 stock split, making its shares more accessible to retail investors

Page 17
 Dupont Analysis - Return on Equity & Return on Asset
Return on Equity (ROE)
Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23
Net Profit 210.2 292.8 469.0 329.0 694.1 1,497.4 2,055.9
Average Shareholder Equity 1,731.5 1,884.0 2,663.5 3,426.2 3,802.0 4,591.1 6,019.4
Return on Equity 12.14% 15.54% 17.61% 9.60% 18.26% 32.62% 34.15%

ROE - Dupont Equation

Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23
Net Profit 210.2 292.8 469.0 329.0 694.1 1,497.4 2,055.9
Revenue 4,003.5 5,105.3 7,129.6 6,450.1 8,823.2 13,173.1 16,042.6
Net Profit Margin (A) 5.25% 5.74% 6.58% 5.10% 7.87% 11.37% 12.82%

Revenue 4,003.5 5,105.3 7,129.6 6,450.1 8,823.2 13,173.1 16,042.6

Average Total Asset 5,050.0 5,636.8 7,186.8 8,411.5 9,013.4 10,598.9 13,402.7
Asset Turnover Ratio (B) 0.8x 0.9x 1.0x 0.8x 1.0x 1.2x 1.2x

Average Total Asset 5,050.0 5,636.8 7,186.8 8,411.5 9,013.4 10,598.9 13,402.7
Average Shareholder Equity 1,731.5 1,884.0 2,663.5 3,426.2 3,802.0 4,591.1 6,019.4
Equity Multiplier (C) 2.92x 2.99x 2.70x 2.46x 2.37x 2.31x 2.23x

Return on Equity (A*B*C) 12.14% 15.54% 17.61% 9.60% 18.26% 32.62% 34.15%

Return on Asset
Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23
Net Profit 210.2 292.8 469.0 329.0 694.1 1,497.4 2,055.9
Average Total Asset 5,050.0 5,636.8 7,186.8 8,411.5 9,013.4 10,598.9 13,402.7
Return on Asset 4.16% 5.20% 6.53% 3.91% 7.70% 14.13% 15.34%

ROA - Dupont Equation

Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23
Net Profit 210.2 292.8 469.0 329.0 694.1 1,497.4 2,055.9
Revenue 4,003.5 5,105.3 7,129.6 6,450.1 8,823.2 13,173.1 16,042.6
Net Profit Margin (A) 5.25% 5.74% 6.58% 5.10% 7.87% 11.37% 12.82%

Revenue 4,003.5 5,105.3 7,129.6 6,450.1 8,823.2 13,173.1 16,042.6

Average Total Asset 5,050.0 5,636.8 7,186.8 8,411.5 9,013.4 10,598.9 13,402.7
Asset Turnover Ratio (B) 0.8x 0.9x 1.0x 0.8x 1.0x 1.2x 1.2x

Return on Asset (A*B) 4.16% 5.20% 6.53% 3.91% 7.70% 14.13% 15.34%

Dupont Summary
• ROE of Varun Beverages has consistently risen to from 3.91% to 32.12% slighty in 2019 and showed moderate
growth even during COVID-19 despite the reducing debt.
• The Net Profit Margin has consistenly risen from 1.69% to 12.05% and the asset turnover ratio has shown
moderate growth owing to improving efficiency of assets rising from 0.79x to 1.20x from FY17 -FY23,
decreasing only during COVID-19 to 0.77x.
• The company has reduced its financial leverage across years FY17-FY23, with its equity multiplier decreasing
from 2.92x to 2.23x.
• The ROA has increased from 1.69% to 12.05% from FY17-FY23, showing an exception growth in the year
2023.

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 reasearch analyst before making any investments

Page 18
 VARUN BEVERAGES LTD
(VBL | BSE Code: 540180)
INR 597.75
52 Week (High - INR 683 & Low - 370)

Altman's Z Score Analysis

Avenue Supermarts Limited, d/b/a DMart, is an Indian retail corporation that operates a chain of hypermarkets in India. It
was founded by Radhakishan Damani in 2002 when its first store was opened in Powai, Mumbai. As of December 2022, it
has 306 stores across 14 states in India. The company has its headquarters in Mumbai. As of 31 March 2022, DMart had a
total of 10,713 permanent employees and 58,597 employees hired on contractual basis.

Retained Earnings / Total Assets EBIT / Total Assets

11.54% 11.73% 19.99%
19.33%

11.63% 12.14%
6.13% 10.85%
9.32%
8.12%
4.14% 4.22% 3.73%
2.93%

2017 2018 2019 2020 2021 2022 2023 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23

Market Cap / Long term Liabilities Sales / Total Assets

113.38%
1183.51% 105.63%
92.11%
85.12% 85.12%
75.89% 76.36%

442.38%

151.44%
26.63% 30.24% 53.21% 73.09%

2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020 2021 2022 2023

Recent Updates

• Varun Beverages has plans to raise Rs 7,500 crore from the market through Qualified Institutions
Placement (QIP)
• The Relative Strength Index of the stock stood at 35.64 on 8 Oct 2024.
• The company saw a revenue growth of 28.3% in the June quarter of 2024, reaching ₹7,196.86 crore
• Their profit increased by 25.5%, showing strong performance
• In late 2023, Varun Beverages expanded its African footprint by acquiring the South African-based Beverage
Company (Bevco) for ₹1,320 crore

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 Altman's Z Score Analysis Calculation
Working Capital / Total Assets
Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23
Working Capital 288.9 55.8 202.7 264.7 659.3 1,447.3 2,015.3
Total Assets 5,275.6 5,998.0 8,375.6 8,447.4 9,579.5 11,618.2 15,187.2
Working Capital / Total Assets (A) 5.48% 0.93% 2.42% 3.13% 6.88% 12.46% 13.27%

Retained Earnings / Total Assets

Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23
Retained Earnings 154.6 248.3 353.1 315.1 586.9 1,340.9 1,781.9
Total Assets 5,275.6 5,998.0 8,375.6 8,447.4 9,579.5 11,618.2 15,187.2
Retained Earnings / Total Assets (B) 2.93% 4.14% 4.22% 3.73% 6.13% 11.54% 11.73%

EBIT / Total Assets

EBIT 491.7 650.7 973.7 686.3 1,162.7 2,245.8 3,035.8
Total Assets 5,275.6 5,998.0 8,375.6 8,447.4 9,579.5 11,618.2 15,187.2
EBIT/Total Assets (C) 9.32% 10.85% 11.63% 8.12% 12.14% 19.33% 19.99%

Market Cap / Long term Liabilities

Market Cap 706.8 849.1 1,818.5 2,350.8 5,128.8 17,181.2 64,280.0
Long term Liabilities 2,653.7 2,807.9 3,417.2 3,216.1 3,386.8 3,883.8 5,431.3
Market Cap / Long term Liabilities (D) 26.63% 30.24% 53.21% 73.09% 151.44% 442.38% 1183.51%

Sales / Total Assets

Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23
Total Sales 4,003.5 5,105.3 7,129.6 6,450.1 8,823.2 13,173.1 16,042.6
Total Assets 5,275.6 5,998.0 8,375.6 8,447.4 9,579.5 11,618.2 15,187.2
Return on Asset (E) 75.89% 85.12% 85.12% 76.36% 92.11% 113.38% 105.63%

Altman's Z Score
Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23
Final Score 0.5 0.6 0.7 0.7 1.4 4.0 8.5
Financial Stability Distressed Distressed Distressed Distressed Distressed Strong Strong
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 reasearch analyst before making any investments

Page 20