Industry Profile: India is expected to become the fifth largest manufacturing country in the world by the end of the year 2020 According to the Global Manufacturing Competitiveness Index published by Deloitte. Manufacturing has emerged as one of the high-growth sectors in India.
The Gross Value Added (GVA) at current basic prices from the manufacturing sector in India grew at a CAGR of 4.34 percent during FY12 and FY18 as per the second advance estimates of annual national income published by the Government of India. During April-September 2018, GVA from manufacturing at current prices grew 14.8 percent year-on-year to Rs 138.99 trillion (US$ 198.05 billion). Under the Make in India initiative, the Government of India aims to increase the share of the manufacturing sector to the gross domestic product (GDP) to 25 percent by 2022, from 16 percent, and to create 100 million new jobs by 2022.
With the help of the Make in India drive, India is on the path of becoming the hub for hi-tech manufacturing as global giants such as GE, Siemens, HTC, Toshiba, and Boeing have either set up or are in the process of setting up manufacturing plants in India, attracted by India’s market of more than a billion consumers and increasing purchasing power. Cumulative Foreign Direct Investment (FDI) in India’s manufacturing sector reached US$ 76.82 billion during April 2000-June 2018. India has become one of the most attractive destinations for investments in the manufacturing sector.
Company Profile: The company was incorporated in 1995 and is headquartered in Gurugram, India. Varun Beverages Limited sells its products to retail outlets directly and through distributors. Varun Beverages Limited operates as the franchisee of carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs) sold under trademarks owned by PepsiCo in India and internationally. The company produces and distributes a range of CSDs under the Pepsi; Diet Pepsi; Seven-Up; Mirinda Orange; Mirinda Lemon, Mountain Dew; Seven-Up Nimbooz Masala Soda; Evervess Soda; and Sting, and Gatorade brands. It also produces and distributes NCBs under the brands Tropicana Slice with Mango based drinks variants; Tropicana Frutz with Lychee, Apple, Mango, Mix Fruit, and Orange flavors; Nimbooz with Lemon based drink variants; and Quaker Oat Milk, as well as packaged drinking water under the brand Aquafina. In addition, the company has a franchise for the Ole brand of PepsiCo products in Sri Lanka.
Varun Beverages is one of the largest franchisees of PepsiCo in the world. The company produces & distributes carbonated drinks, juices & packaged drinking water in six countries including India. Some of the PepsiCo brands produced by VBL include Pepsi, Diet Pepsi, Seven-Up, Mirinda, Mountain Dew, Nimbooz, String, Slice, Tropicana, and Aquafina among others. The company has operations in India (except Andhra Pradesh, J&K & Ladakh), Sri Lanka, Nepal, Morocco, Zambia & Zimbabwe/
Shareholding Pattern: BSE Filing
Financials and ratio: [table id=219 /]
Future Prospects: The company is acquiring the bottling plants of PepsiCo and that will be a growth engine but how long? the company contributed 50% of sales to PepsiCo but how much more? If the deal gets through, Varun Beverages would get access to PepsiCo’s pan India supply chain, which could aid the sale of other allied products like fruit juices from the latter’s portfolio. As per ICICI direct brokerage report, The company commissioned a new beverage manufacturing plant in Bihar and a new backward integrated unit in J&K during Q1CY22. It also entered into an agreement to manufacture “Kurkure Puffcorn” for PepsiCo India & invested Rs 23 crore towards the manufacturing plant. The company also saw a pickup in Other drinks including fruit juice drinks. As the kurkure also come to their product fr manufacturing it will be big boost for the company.
