The Gurgaon-based bottler handles approximately 90% of PepsiCo sales in India, and it is expected to further expand the distribution of its products to remote regions of the country. Furthermore, analysts anticipate that the rising temperatures, driven by climate change, will contribute to increased sales, the report added.
The recent heatwave in India likely gave a boost to beverage sales in the country. VBL stock touched an all-time high of Rs 873.58 on May 26, but came off elevated levels amid concerns of overheated valuation. The stock trades at a heady 12-month forward price-earnings ratio of 50X, the report added, making it one of the most expensive beverage stocks in the world.
In the upcoming quarter, the stock is likely to benefit from seasonality factor and organic growth trajectory.
The company is engaged in the production and distribution of a diverse range of carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs), including packaged drinking water under PepsiCo’s trademarks. Some of the well-known PepsiCo CSD brands produced and marketed by VBL include Pepsi, Mountain Dew, Seven-Up, and Mirinda, among others. Additionally, VBL handles the production and distribution of PepsiCo’s NCB brands such as Tropicana Slice, Gatorade, and Aquafina packaged drinking water.
Since the 1990s, VBL has cultivated a strong and enduring partnership with PepsiCo, expanding its licensed territories, diversifying its product portfolio, and enhancing its distribution network. Currently, VBL holds franchises for various PepsiCo products across 27 Indian states and 7 Union Territories. India serves as the largest market for VBL, contributing approximately 80% of its revenue in the fiscal year 2022.
In addition to the Indian market, VBL has also obtained franchises for PepsiCo products in territories including Nepal, Sri Lanka, Morocco, Zambia, and Zimbabwe. Through its long-standing association with PepsiCo, VBL has established itself as a leading player in the beverage industry, leveraging the popularity and reach of PepsiCo’s iconic brands. The company’s extensive network and diversified product offerings have contributed to its continued growth and market success.