VBL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.4

📊 Core Financials Breakdown

Profitability

ROCE: 23.8% and ROE: 20.1% — excellent, reflecting strong capital efficiency and shareholder value creation.

EPS: ₹7.57, with PAT rising from ₹678 Cr. to ₹1,160 Cr. — a sharp improvement, though quarterly variation is modest at 0.87%.

Debt-to-equity: 0.02 — virtually debt-free, a major strength for long-term sustainability.

Dividend Yield: 0.21% — minimal, as the company prioritizes reinvestment over payouts.

Institutional Sentiment

FII holdings declined (-1.12%), while DII holdings increased (+1.33%) — domestic investors remain bullish despite foreign caution.

💰 Valuation Metrics

Metric Value Insight

P/E Ratio 63.1 High, but justified by premium positioning and growth.

P/B Ratio ~8.88 Elevated, typical for high-margin consumer businesses.

PEG Ratio 0.93 Reasonable — valuation aligns with expected earnings growth.

Intrinsic Value ~₹450–₹470 (est.) Current price of ₹474 is near fair value.

🧠 Business Model & Competitive Edge

Core Operations: Varun Beverages Ltd. (VBL) is one of the largest PepsiCo bottlers globally, producing and distributing carbonated soft drinks, juices, and bottled water.

Strengths

Exclusive bottling rights for PepsiCo in India and several international markets.

Expanding footprint across Africa and Southeast Asia.

Operational efficiency through automation and supply chain optimization.

Strong demand tailwinds from rising beverage consumption and favorable demographics

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Challenges

Seasonal demand volatility and raw material price fluctuations.

Regulatory risks around sugar content and plastic packaging.

RSI at 42.6 — neutral, MACD at -7.91 — bearish momentum.

📈 Entry Zone & Technicals

DMA 50: ₹488, DMA 200: ₹513 — price is below both, indicating short-term weakness.

RSI: 42.6 — neutral zone.

MACD: -7.91 — bearish crossover.

📌 Entry Zone: ₹450–₹470 — ideal for accumulation on dips.

🕰️ Long-Term Holding Guidance

2025 Target: ₹592.20 (average analyst estimate)

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2026–2028 Target: ₹650–₹750

2030 Target: ₹900+

Holding Strategy: VBL is a premium consumer play with strong fundamentals, global partnerships, and low debt. Ideal for long-term investors seeking exposure to India’s consumption boom and global beverage demand. Accumulate during technical weakness and hold through cycles.

You can explore Trendlyne’s analyst reports on VBL or read NiftyNews’s 2025 growth outlook for deeper insights.

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niftynews.blog

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trendlyne.com

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