Varun Beverages Management Commentary
About the Company: Varun Beverages Ltd (VBL) is one of the largest bottlers of PepsiCo beverages in India and other international markets. The company produces, packages, and distributes aerated soft drinks, juices, and packaged water, serving millions of outlets across the regions it operates in. VBL focuses on driving volume growth, expanding reach, and maintaining strong operational efficiency.
GST Reforms Impact
- Positive impact expected from recent GST reforms.
- Aerated beverages GST & cess increased from 28% & 12% to 40%.
- No change in taxes for carbonated beverages.
- Water & juices see rate reduction, benefiting ~30% of total business.
Productivity & Volume Outlook
- Company aims to further enhance productivity.
- Higher volumes expected due to lower prices.
Competition & Market View
- Currently reaching 4.5 mn outlets out of 13 mn FMCG outlets.
- Large market scope allows multiple players to grow.
- Low per capita consumption globally; competition not a major concern.
- Margins expected to remain stable despite competitive pressures.
Growth Outlook
- Expect double-digit growth to resume post-monsoon.
Investor Takeaway
Varun Beverages is positioned to benefit from selective GST reductions and stable competition. With an extensive distribution network and focus on productivity, the company is likely to maintain steady margins while resuming strong volume growth in the coming quarters.
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Written by Indian-Share-Tips.com, which is a SEBI Registered Advisory Services
