Varun Beverages Ltd (VBL) is India’s largest PepsiCo franchisee and one of the biggest beverage bottlers globally. The company manufactures, sells, and distributes a wide range of carbonated soft drinks (like Pepsi, Mirinda, 7UP), non-carbonated beverages (Tropicana, Lipton), packaged water (Aquafina), and snacks under PepsiCo brands across India and select international markets. With strong revenue growth, expanding operations in Africa, and consistent execution, VBL has become a key player in India’s FMCG sector. However, its premium valuation and rising debt warrant careful analysis. This article provides a fact-based outlook on VBL’s fundamentals and offers a realistic share price target for each year from 2026 to 2030.
Ownership: Promoter holding at 59.44%, led by the Jain family
Clarifications:
Is VBL a good stock to buy? It’s a high-quality growth business but trades at a premium valuation (P/E ~61x, P/B ~8.6x). Suitable only for long-term investors who can tolerate volatility.
Has VBL given bonus or split shares? No bonus issue recently. The last stock split was in 2017 (face value reduced from ₹10 to ₹2).
What was VBL’s IPO price? ₹72 per share (July 2016).
Future outlook: Strong—driven by beverage penetration in Tier-2/3 cities, international expansion, and product diversification (healthy drinks, snacks).
Varun Beverages: Key Financial Snapshot
Metric
Value
Market Capitalization
₹1,60,001.89 Cr
Current Share Price
₹473
52-Week High / Low
₹664 / ₹419
P/E (TTM)
60.97
P/B (TTM)
8.58
Book Value (TTM)
₹55.12
EPS (TTM)
₹7.76
ROE
19.66%
ROCE
23.43%
Dividend Yield
0.21%
Debt
₹831.54 Cr
Cash Reserves
₹2,058.71 Cr
Sales Growth (YoY)
13.58%
Profit Growth (YoY)
30.72%
Shareholding Pattern
Category
Holding (%)
Promoters
59.44%
Foreign Institutions (FII)
20.31%
Domestic Institutions (DII)
13.56%
Public (Retail)
6.70%
Others
0%
Note: Strong institutional ownership reflects confidence in VBL’s growth story.
Based on strong profit growth, international expansion, and PepsiCo partnership strength, but tempered by high valuation and modest ROE, we project the following realistic price ranges:
Year
Target Price Range (₹)
2026
₹500 – ₹580
2027
₹540 – ₹640
2028
₹580 – ₹700
2029
₹620 – ₹760
2030
₹660 – ₹820
These targets assume:
EPS CAGR of 18–20% (supported by 30% recent profit growth, though likely to moderate)
P/E compression from 61x to 45–50x by 2028 due to market normalization
Stable ROCE (~23%) and controlled debt levels
Year-wise Breakdown
Varun Beverages Share Price Target 2026
Year
Target 1
Target 2
2026
₹500
₹580
Rationale: Despite 30%+ profit growth, the stock trades at a steep premium. Near-term upside depends on volume recovery in rural markets and margin stability in a competitive beverage landscape.
Varun Beverages Share Price Target 2027
Year
Target 1
Target 2
2027
₹540
₹640
Rationale: Expansion in Africa and South Asia could contribute meaningfully to revenue. New product launches (functional drinks, healthy juices) may improve mix.
Varun Beverages Share Price Target 2028
Year
Target 1
Target 2
2028
₹580
₹700
Rationale: By 2028, international operations may account for 15–20% of profits. If ROE improves above 22%, re-rating is possible.
Varun Beverages Share Price Target 2029
Year
Target 1
Target 2
2029
₹620
₹760
Rationale: Long-term play on India’s low per-capita beverage consumption (only ~50 bottles/year vs global avg >100). Urbanization and summer demand support volume growth.
Varun Beverages Share Price Target 2030
Year
Target 1
Target 2
2030
₹660
₹820
Rationale: The upper end assumes successful geographic diversification, debt control, and sustained double-digit earnings growth. However, high P/B (8.6x) limits aggressive upside.
Strengths vs Risks
✅ Strengths
Exclusive PepsiCo franchise with long-term contracts
Healthy cash position (₹2,058 Cr) vs manageable debt (₹831 Cr)
Global expansion is reducing India’s dependency
⚠️ Risks
Very high P/E (61x) and P/B (8.6x) – among highest in FMCG
Low dividend yield (0.21%) – not suited for income investors
Competition from Coca-Cola, local brands, and the health-conscious shift
Water scarcity risks in manufacturing regions
Investment Suitability
Factor
Assessment
Risk Profile
Moderate-to-High (large-cap growth stock)
Time Horizon
Long-term (5+ years)
Volatility
Moderate
Dividend/Income
No (minimal yield)
Ideal Investor
Growth-focused investor comfortable with premium valuations and sector competition
FAQs
It’s a high-quality growth business, but current valuations are rich. Best bought on dips for long-term portfolios.
No recent bonus. Last split was in 2017 (₹10 → ₹2 face value).
₹72 per share in July 2016.
Bright—backed by PepsiCo, international growth, and rising beverage consumption in emerging markets.
A realistic range is ₹500–₹580, assuming steady execution and no major macro disruptions.
Final Verdict
Varun Beverages Ltd is a market leader with a scalable, asset-light franchise model. Its growth trajectory remains intact, supported by strong brand partnerships and geographic diversification. However, the current valuation leaves little margin for error. Our 2026–2030 price targets (₹500–₹820) reflect steady appreciation—not explosive returns. Investors should focus on long-term compounding, not short-term momentum.
📌 Disclaimer: Price targets are estimates based on current fundamentals and sector trends. They are not investment advice. Please consult a SEBI-registered advisor before investing.
