Varun Beverages | Latest market updates

Refreshing Developments in Multibagger Stock Varun Beverages

VBL is making waves in the beverage industry with significant expansions and a strategic acquisition, resulting in strong market growth and impressive stock performance.

A Cool Sip Under the Sun

Imagine a hot day under the blazing sun, sweat dripping down your forehead. You crave something cool and refreshing—enter the world of beverages. For Varun Beverages Ltd (VBL), this moment encapsulates their mission to quench your thirst with a variety of drinks. Let’s dive into the company’s latest developments that are set to invigorate the beverage industry.

A Global Presence with Local Impact

Varun Beverages Ltd (VBL) has a wide operational reach, spanning six countries, with a significant strategic partnership with PepsiCo for over 32 years. In fiscal year 2023, the company generated 83% of its revenue from India, Sri Lanka, and Nepal, while the remaining 17% came from Morocco, Zambia, and Zimbabwe. This broad presence allows VBL to cater to diverse markets, delivering a range of beverages to meet varying consumer preferences.

Expansion and New Production Facilities

VBL recently announced significant expansions in its production capabilities. The company began commercial production of carbonated soft drinks, juices, beverage base syrup, and PET preforms at its facility in Khordha, Odisha. Additionally, at its Guwahati, Assam plant, it started production of PET preforms and closures. Furthermore, the company inaugurated commercial production of carbonated soft drinks and energy drinks at its Gorakhpur, Uttar Pradesh facility, with plans to expand into juices and value-added dairy products. These expansions not only boost VBL’s manufacturing power but also widen its market reach.

Strong Performance and Market Growth

VBL ended 2023 on a high note with double-digit volume growth in both Indian and international markets. The realization per case increased by 7% to Rs 176, owing to a more favorable product mix emphasizing smaller 250 ML SKUs, a greater focus on the Sting portfolio, and higher realization in international markets. This strategy has strengthened VBL’s position in the beverage market, creating a solid foundation for future growth.

Strategic Acquisition for Synergy and Expansion

In December 2023, VBL announced the acquisition of South African-based BevCo. This move offers significant synergy benefits and opens new market opportunities. BevCo holds a 1.5% overall market share in South Africa, with its own brands accounting for 13-14%. With VBL’s operational expertise, this acquisition could lead to substantial, sustainable growth in the long term.

Impressive Stock Performance

Investors have taken notice of VBL’s robust growth and strategic moves. The company’s stock has delivered multi-bagger returns, jumping 105% in the last 12 months and an astonishing 600% in the last 36 months. This remarkable performance underscores VBL’s success in the beverage industry and its potential for further expansion.

Disclaimer: This post has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.