Varun Beverages (VBL)

FairStock Score: 48/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach Varun Beverages with Graham's caution and Buffett's preference for durable economics. On quality, the numbers are respectable: ROE 16.85%, ROCE 19.99%, debt/equity only 0.16, positive FCF ₹784 Cr, Piotroski 7/9 and Altman Z-Score 5.83. A five-year revenue CAGR of 27.44% shows it has grown briskly, though recent sales and profit growth are slower at 13.08% and 14.15%. Promoter holding of 59.43% aligns interests. Latest quarter sales were ₹4,204 Cr and net profit ₹260 Cr, indicating scale, but I need to see cash conversion and margin durability. The moat is not proven by these figures alone; returns are above average, not extraordinary. The balance sheet is conservative, which I like. The trouble is price. At ₹435, market cap ₹1.47 lakh Cr, P/E 43.50, P/B 7.51, EV/EBITDA 32.53, and dividend yield 0.46%, the market already pays richly for growth. Graham's Number is ₹109.59, giving a margin of safety of -311.91%; that is not a margin, it is a warning. FairStock Score 48/100 (MIXED) reinforces caution. I want a good business at a fair price, not a fast grower at a heroic multiple. VBL has quality traits—low debt, positive FCF, and growth—but the valuation leaves little room for error. If growth reaccelerates and FCF scales, the premium may be justified; otherwise, patience and a lower entry price are wiser. Category: Fast Grower.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer