Varun Beverages Ltd. share price target

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...

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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.

Varun Beverages recent declared its Q4CY17 & CY17 results. The last quarter of the year was strong footed on the back of volumes growth. Net revenues grew by 21.4% & 3.7% to `527crs. & `4003crs. in Q4 & CY17 respectively. EBITDA for Q4 de-grew by 14% on a YO-Y basis to `22.5crs. while CY17 EBIDTA grew by 5% to `835.8 crs. Margins contracted by170 bps in Q4 to 4.3% while CY17 margins expanded by30 bps to 20.9%. Given the seasonality in the business, Q4 is a loss quarter for the company. PAT for CY17 increased by...

ICICI Securities Ltd | Retail Equity Research Revenues witnessed growth of 21.4% to | 527.4 crore (I-direct estimate | 495.3) led by volume growth from territory acquisition in MP, Odisha earlier this year. The company also acquired territory in Bihar, Jharkhand and Chhattisgarh during the quarter Operating profit declined to | 22.5 crore against | 36.3 crore in the corresponding quarter. Q4 is seasonally weak for the company as volumes of carbonated beverages decline substantially during...

(post GST shock) and benefits from recently acquired new territories (inorganic growth). Current valuations (PER of 33.2x and EV/EBITDA of 12.9x CY19E) are attractive given strong EPS growth and ROE expansion. Our TP of Rs902 is based on EV/EBITDA of 17x...

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We met the management of Varun Beverages (VBL) to understand the business of the company and its growth outlook. VBL is the one of the largest franchisees of PepsiCo globally (ex-US) for production and distribution of carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs) sold under trademarks owned by PepsiCo. The company enjoys more than 25 years of strategic association with PepsiCo (since 1990), has expanded its territories to 17 states (mainly North and North East India), two union territories in India; Nepal, Sri Lanka,...