Varun Beverages Ltd. share price target

The new territories are in South and West regions and should generate superior ROCEs due to better seasonality. The deal size is Rs18bn, valuing the acquiring business at 1x EV/Sales and 4.5x EV/EBITDA on a 1-year forward basis. VBL plans to raise new equity capital to partly fund the deal. We have not factored this into our forecasts as we await further details. The deal is expected to be EPS-accretive by CY20. We expect ROE to rise to 19.5% in CY20 from 15% in CY18. In our view, VBL should command valuations similar to other consumer franchise...

Varun Beverages Ltd. declared its Q3CY18 results recently. Net Revenues grew by 21% YoY to `1166crs. led by robust volume growth of 17.2%. EBITDA for Q3CY18 grew by 13.9% on a YOY basis to `211.3crs. Margins contracted by 110bps to 18.1%. PAT for Q3CY18...

ICICI Securities Ltd | Retail Equity Research Revenues witnessed a growth of 21% to | 1165.7 crore (I-direct estimate: | 1127.3 crore) led by 17.2% volume growth mainly on the back of territory acquisition in MP, Odisha, Bihar and Jharkhand...

Varun Beverages Ltd. declared its Q2CY18 results recently. Net Revenues grew by 26.1% to `2059.1 crs. led by robust volume growth of 21.3%. EBITDA for Q2 grew by 19.6%on a YO-Y basis to `574.8 crs. Margins contracted by 150 bps to 27.9%. PAT for Q2CY18 increased by 23.6% yoy. This was on the back of robust volume growth in India and gradual...

ICICI Securities Ltd | Retail Equity Research Revenues witnessed growth of 26.1% to | 2059.1 crore (I-direct estimate: | 2052.8 crore) led by 21.3% volume growth mainly on the back of some of the territory acquisition in Madhya Pradesh, Odisha, Bihar and Jharkhand last year. The company reported organic volume growth of 12.6% in the India business whereas it reported 9.8% on a consolidated basis during the quarter EBITDA grew 19.6% YoY to | 574.9 crore. Operating margins...

Maruti Suzuki India: Leader strengthening its leadership, Scope for margin expansion despite recent headwinds; Varun Beverages: A proxy play on beverages growth in underpenetrated markets

Varun Beverages Ltd. declared its Q1CY18 results recently. Net Revenues grew by 24.5% to `1095crs. in Q1. EBITDA for Q1 grew by 25.8%on a Y-O-Y basis to `172.7crs. Margins expanded by 20 bps to15.8%. PAT for Q1CY18 increased by 185.8% yoy. This was on the...

Revenues witnessed growth of 6.8% (24.5% growth on a comparable basis) to | 1122.3 crore (I-direct estimate | 1244.8 crore) led by 19.7% volume growth on the back of territory acquisition in Madhya Pradesh and Odisha last year. The company reported organic volume growth of 12% in the quarter Operating profit grew 25.8% to | 172.7 crore vs. | 137.2 crore in the corresponding quarter. Operating margins improved 20 bps to 15.8%. Q1 is a seasonally lean quarter for the company. Net profit...

PepsiCo India has transferred five new territories and its entire juice portfolio to Varun Beverages (VBL) over past few months. This is in line with our expectations and a testimony to VBL's proven ability over time.