1. At a Glance – The Cold Drink Mafia Is Still Printing Money
Varun Beverages Ltd (VBL) currently sits at a market cap of ~₹1.52 lakh crore, trading near ₹450, nursing a –5.8% return over 3 months and a painful –24% return over 1 year. Meanwhile, fundamentals are doing push-ups in the background.
FY25 revenue came in at ₹216,853.8 million, PAT at ₹30,620.4 million, and operating margins stayed north of 23%, which is obscene for a business that literally sells sugar water. ROCE at ~20%, ROE ~16.8%, debt-to-equity just 0.13, and interest coverage of 24.6x—banks sleep well at night lending to these guys.
The stock, however, trades at ~50x P/E, which means expectations are sky-high and patience is mandatory. VBL is no longer a “growth discovery”; it’s a global beverage compounder being priced like a luxury brand.
So the question is simple:
Is this Coca-Cola energy with Indian execution… or a great business temporarily punished for being too popular?
2. Introduction – From Pepsi Bottler to Beverage Empire
Varun Beverages Ltd started as a humble Pepsi bottler in the 1990s. Fast forward three decades, and it has become one of PepsiCo’s largest franchisees globally, operating across India, Sri Lanka, Nepal, Morocco, Zambia, Zimbabwe, South Africa, Lesotho, Eswatini, DRC, and more.
India still contributes ~83–90% of revenues, but Africa is no longer a side quest—it’s now the second growth engine. VBL doesn’t just bottle Pepsi; it owns distribution, cold infrastructure, trucks, crates,
PET caps, and increasingly, snacks.
This is not FMCG glamour. This is logistics-heavy, asset-heavy, execution-first capitalism. And VBL executes like a German engineer on caffeine.
3. Business Model – WTF Do They Even Do?
VBL takes concentrate from PepsiCo, adds water, sugar, carbonation, packaging, distribution, and ruthless execution.
Revenue streams:
- Carbonated Soft Drinks (76%) – Pepsi, 7UP, Mountain Dew, Mirinda, Sting
- Water (16%) – Aquafina
- Juices (8%) – Tropicana, Slice
What makes VBL dangerous:
- 36 manufacturing plants in India + 12 international
- 130+ owned depots
- 2,500+ owned vehicles
- 10.2 crore visi-coolers installed
- Backward integration into PET preforms, caps, crates, corrugated boxes
This is less “brand business” and more industrial-scale beverage warfare.
Lazy competitors outsource.
VBL owns the battlefield.
4. Financials Overview – Numbers Don’t Lie, Valuations Do
Quarterly Performance (Q3 FY26 – Dec 2025)
(Consolidated, ₹ crore)
| Metric | Latest Qtr | YoY Qtr | Prev Qtr | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 4,204 | 3,689 | 4,897 | 14.0% | -14.2% |
| EBITDA | 637 | 579 | 1,146 | 10.0% | -44.4% |
| PAT | 260 | 196 | 745 | 36.0% | -65.1% |
| EPS (₹) | 0.74 | 0.55 | 2.19 | 35% | -66% |
Yes, QoQ looks ugly.
No, the business is not broken.
This is seasonality. Soft drinks don’t
