Varun Beverages Ltd.
NSE: VBLVarun Beverages Ltd.: A 30-second snapshot
Varun Beverages (VBL), the primary PepsiCo bottler across South Asia and Africa, trades at ₹514 with a trailing PE of 54.6 and forward PE of 42.4, above the 200-DMA (₹468.55) and 50-DMA (₹455.98). Revenue has compounded at 18.1% and earnings at 20% over 5 years, but free cash flow was positive in only 1 of those tracked years while debt-to-equity stands at 12.71 — a structural outlier versus FMCG peers.
P/E
54.6
Forward P/E
42.4
ROE
—
Debt / Equity
12.71
Profit Margin
+14.0%
Div. Yield
+0.4%
5Y ROE > 15%
4/5
5Y FCF > 0
1/5
Quality
57/100
News
8 headlines · 5 positive · 0 negative
Varun Beverages Q1 Review: Brokerages Stay Bullish On 'Refreshing' Quarter — Check Revised Targets - NDTV Profit
NDTV Profit
Varun Beverages up 30% in April; quarterly results, dividend 2026 announcement today | Expectations - Business Today
Business Today
Varun Beverages Q4 result: Profit rises 20% to ₹879 cr, revenue up 18.3% - Business Standard
Business Standard
Varun Beverages Declares Interim Dividend and Approves Q1 2026 Results - TipRanks
TipRanks
VBL Stock: Rising Summer Demand but Growing Risk from Campa; What Lies Ahead? - Trade Brains
Trade Brains
Recent context
- ·Q4 FY26 results (April 27, 2026) showed profit of ₹879 crore (+20% YoY) and revenue up 18.3%; brokerages reviewed the quarter with revised price targets, per NDTV Profit and Business Standard coverage.
- ·An interim dividend was declared alongside Q1 2026 results; the stock was reported up approximately 30% in April before settling at current levels near its 52-week high.
- ·Trade Brains flagged competitive risk from Campa Cola (Reliance-backed) as a growing structural challenge to VBL's distribution dominance in the value segment of the carbonated beverage market.
Strengths
- +Revenue 5-year CAGR of 18.1% and earnings 5-year CAGR of 20% place VBL among the faster-growing large-cap FMCG names; profit margin stands at 14.0%.
- +Stock is above both its 200-DMA (₹468.55) and 50-DMA (₹455.98), up 13% over 3 months and only 3.78% below the 52-week high, with RSI at 63.4 (neutral zone).
- +Debt trend is classified as falling, and the consistency score of 83 out of 100 indicates the business has maintained above-15% ROE in 4 of the tracked years despite its capital-intensive expansion model.
- +Q4 FY26 results showed profit up 20% YoY and revenue up 18.3% YoY, with an interim dividend declared — consistent with the multi-year earnings growth trajectory.
Weaknesses
- −D/E of 12.71 is a structural outlier relative to FMCG peers; HINDUNILVR, NESTLEIND, and BRITANNIA all carry D/E well below 1.0, raising questions about interest coverage and refinancing risk during credit-tightening cycles.
- −FCF was positive in only 1 of the tracked years, even as reported earnings grew rapidly; persistent cash consumption at this scale introduces reliance on debt or equity markets to fund continued expansion.
- −Quality score of 45 ranks 4th of 6 FMCG peers, below HINDUNILVR (58), NESTLEIND (61), and BRITANNIA (50), indicating below-median composite quality within the sector.
- −ROE data is unavailable for the current period, limiting direct comparison with peers; NESTLEIND reported ROE of 76.3% and BRITANNIA 53.3%, both substantially higher than VBL's historical profile.
Open questions
- ?Does the debt-to-equity of 12.71 reflect temporary capex for geographic expansion or a structurally leveraged balance sheet, and how does the interest coverage ratio trend over the past 3 years?
- ?Is the persistent negative FCF a deliberate choice to invest ahead of demand (capex-led growth) or a signal that reported earnings are not translating to cash generation, and what is management's stated FCF timeline?
- ?How has VBL's market-share trajectory evolved in regions where Campa Cola has re-entered distribution, and what is the price-point overlap between the two brands?
- ?Given the forward PE compression from 54.6 trailing to 42.4 forward, what earnings growth rate is implicitly required to sustain current valuation, and how does that compare to the 5-year historical CAGR of 20%?
Peer comparison: FMCG
Ranks 4 of 6 on quality| Symbol | Name | P/E | ROE | Quality |
|---|---|---|---|---|
| VBL | Varun Beverages Ltd.You're viewing | 54.6 | — | 45 |
| Industry avg | across 5 peers | 54.8 | +39.5% | 52 |
| NESTLEIND | Nestle India Ltd. | 78.1 | +76.3% | 61 |
| HINDUNILVR | Hindustan Unilever Ltd. | 48.7 | +21.6% | 58 |
| BRITANNIA | Britannia Industries Ltd. | 50.9 | +53.3% | 50 |
| TATACONSUM | Tata Consumer Products Ltd. | 77.4 | +6.9% | 45 |
| ITC | ITC Ltd. | 18.9 | — | 44 |
Technical state
Current price
₹514.00
SMA 50
₹455.98
SMA 200
₹468.55
RSI (14)
63.4 (neutral)
From 52w high
-3.8%
1Y return
+2.8%
3M return
+13.0%
50-DMA
Above
200-DMA
Above
Algorithmic support levels
Algorithmic resistance levels
Risk flags
- highDebt-to-equity of 12.71 is exceptionally elevated for an FMCG company; sector peers (HINDUNILVR, NESTLEIND, BRITANNIA) typically carry D/E well below 1.0, making VBL a structural leverage outlier and raising questions about interest-coverage and refinancing capacity.
- highFree cash flow was positive in only 1 of the tracked years despite a 5-year earnings CAGR of 20% and revenue CAGR of 18.1%; persistent negative FCF alongside rapid reported earnings growth signals high capital intensity and raises questions about earnings quality.
- mediumQuality score of 45 ranks 4th of 6 FMCG peers, sitting below HINDUNILVR (58), NESTLEIND (61), and BRITANNIA (50); mid-to-lower composite quality positioning within the sector.
- low1-year price return of 2.79% lags the broader FMCG recovery; the bulk of last year was spent below current levels before a 13% 3-month rebound.
Cross-section contradictions
- 5-year earnings CAGR of 20% and revenue CAGR of 18.1% are among the stronger compounding rates in the FMCG peer set, yet FCF was positive in only 1 of the tracked years; sustained earnings growth alongside persistent cash consumption is atypical for a consumer-goods bottler and may reflect elevated capex intensity or working-capital absorption.
- Stock is 3.78% below its 52-week high and above both the 50-DMA (₹455.98) and 200-DMA (₹468.55) after a 13% 3-month rebound, yet the 1-year return is only 2.79%; the technical recovery contrasts with what was an extended flat-to-negative stretch through most of the prior year.
For informational purposes only. Not investment advice. VivaTrades is not a SEBI-registered Investment Adviser or Research Analyst. Market data sourced from public feeds; consult a registered adviser before any investment decision.
Fundamentals & technicals: refreshed 25 Jun 2026 · refreshed daily at 01:00 IST
AI synthesis (narrative, snapshot, strengths/weaknesses, peer ranking): generated 20 May 2026 · rotates through NIFTY 500 every ~5 days