Here are some of the major updates that could move the markets tomorrow:
Adani Energy Q2 Results: Net profit rises 34% YoY to ₹276 crore
Adani Energy Solutions Ltd reported a 34% YoY rise in net profit to ₹276 crore for the quarter ended September (Q2 FY24). Its revenue from operations rose 13% YoY to ₹3,674 crore during the same period. EBITDA stood at ₹1,368 crore, up 10% YoY. Other income for the quarter stood at ₹93 crore, compared to ₹125 crore a year ago.
Reliance Jio introduces new onboard diagnostics device
Reliance Jio has introduced a new onboard diagnostics (OBD) device called JioMotive that can transform any car into a smart vehicle. The pocket-size device is easy to install and simply needs to be plugged into the car’s OBD port, commonly found under the dashboard. By using an e-SIM, the device connects to the Jio network, eliminating the need for a separate SIM card or data plan.
Nykaa Q2 Results: Net profit rises 50% YoY to ₹7.8 crore
FSN E-Commerce Ventures Ltd (Nykaa) reported a 50% YoY increase in net profit to ₹7.8 crore for the quarter ended September 2023 (Q2 FY24). Its revenue from operations increased 22% YoY to ₹1,231 crore during the same period. EBITDA stood at ₹80.6 crore, up 32% YoY. The gross merchandise value (GMV) rose 25% YoY to ₹2,943 crore in Q2.
Reliance Retail ramps up Smart Bazaar stores in small towns
Reliance Retail Ventures Ltd (RRVL) is opening more Smart Bazaar stores in towns with a population of up to 50,000 to meet growing demand. RRVL is the retail unit of Reliance Industries. It is the largest grocery retailer in the country that operates stores in multiple formats – Smart Superstore, Smart Point, Smart Bazaar, Fresh Signature, Freshpik and 7-Eleven.
Adani Group is in talks with multiple multinational consumer goods companies to sell its entire 43.97% stake in Adani Wilmar Ltd. The conglomerate is expecting $2.5-3 billion for the stake in the joint venture with Wilmar International, which also owns 43.97% of the company. Adani Wilmar owns the Fortune brand of edible oils and packaged groceries.
Divi’s Labs Q2 Results: Net profit falls 29% YoY to ₹348 crore
Divi’s Labs Ltd reported a 29% YoY fall in net profit to ₹348 crore for the quarter ended September 2023 (Q2 FY24); missing street estimates. The pharma company’s revenue rose 3% YoY to ₹1,909 crore during the same period. Consolidated EBITDA stood at ₹479 crore in Q2.
Larsen and Toubro’s (L&T) subsidiary, L&T Construction, has secured an order to construct the greenfield Bhogapuram International Airport project in Andhra Pradesh. The contract is worth approximately ₹2,500-5,000 crore. The project will initially be developed to handle 6 million passengers per annum (MPA), and the capacity will be further enhanced to 12 MPA.
Varun Beverages Q3 Results: Net profit rises 32% YoY to ₹501 crore
Varun Beverages Ltd (VBL) reported a 32% YoY rise in consolidated net profit of ₹501 crore for the quarter ended September (Q3 CY23). The company follows the January-December financial year cycle. Its revenue from operations grew 22% YoY to ₹3,871 crore during the same period. EBITDA stood at ₹882 crore, up 26% YoY. VBL is PepsiCo’s second-largest franchisee outside the US.
Bata to retail Nine West shoes, accessories in India
Bata India will sell shoes and accessories of US-based lifestyle brand Nine West through its retail stores. The company’s board has approved a licensing and manufacturing deal with Authentic Brands Group for their world-renowned lifestyle brand, Nine West. Bata India will have rights to manufacture, market and distribute Nine West shoes and accessories, across India through its stores.
Products that are sold quickly and at relatively low cost are known as fast-moving consumer goods (FMCG). Another name for such products is consumer packaged goods. FMCGs have a limited shelf life due to high consumer demand (such as for soft drinks and confections) or perishability (such as for meat, dairy products, and baked goods). The top three sectors of this business are Food & Beverages (19%), Healthcare (31%), and Household & Personal Care (50%), respectively. In this article, explore the top FMCG stocks in India!
An Overview of the FMCG Industry
India’s FMCG industry is the biggest in the world. It is estimated that the FMCG sector accounts for around 15% of India’s gross domestic product (GDP) and employs more than 1 crore people. Consumer electronics, food, personal care products, home goods, over-the-counter medications, and other items are all included in this industry. The FMCG industry is optimistic about at least 20% growth in 2023 after ‘exponential growth’ in 2022:
Favourable government policies, a growing rural market and young population, and the expansion of e-commerce platforms are some of the sector’s main development factors.
India has a middle-class population that is greater than the population of the USA, making it a country that no FMCG company can afford to ignore. The FMCG market keeps expanding as more and more people begin to climb the economic ladder and the general public obtains access to the benefits of economic progress.
More importantly, India’s population is getting more consumerist with growing disposable income. Government efforts to broaden financial inclusion and provide social safety nets have further contributed to this.
The FMCG market in India is expected to increase at a CAGR of 14.9% to reach $220 billion by 2025, from $110 billion in 2020.
Top FMCG Stocks in India:
S. No.
Stocks
5-Year Returns
1
Hindustan Unilever Ltd.
62%
2
ITC Ltd.
72%
3.
Nestle India Ltd.
123%
4
Britannia Industries Ltd.
61%
5
Varun Beverages Ltd.
696%
(Figures are as of July 17, 2023. Past performance is no guarantee of future results)
1. Hindustan Unilever Ltd (HUL)
Home care, beauty & personal care, and foods & refreshment are Hindustan Unilever Ltd’s three main FMCG business sectors. The company sells its products largely in India and has manufacturing plants all across the nation. With over 40 brands available across 12 distinct categories, including personal care, fabric care, skincare, hair care, oral care, deodorants, cosmetics goods, beverages, ice cream, frozen desserts, and water filters, HUL is an important part of millions of Indians’ lives. Dove, Lifebuoy, Knorr, and Pears Soap are a few of their brands. Home care brings in 34% of the company’s income, followed by beauty and personal care (44%) and food & drink (19%). HUL has also forayed into the health and wellbeing segment through two strategic investments.
Over the last 5 years, the company’s revenue has grown at a CAGR of 9.35%, while profits have a CAGR of 14.6%. The company is nearly debt free and has a healthy dividend payout ratio of 99.9%. The stock has moved up 62% over the past five years.
2. ITC Ltd
Established in 1910, ITC is the biggest cigarette producer and retailer in the nation. The five business divisions that ITC now works in are FMCG Cigarettes, FMCG Others, Hotels, Paperboards, Paper and Packaging, and Agri-Business. Aashirvaad, Sunfeast, Yippee!, Bingo!, B Natural, ITC Master Chef, Fabelle, Sunbean, and Fiama are among ITC’s top FMCG brands. Additionally, it has added frozen food items, ghee, dairy products, and premium chocolates to its collection of branded packaged meals. ITC is known for assuring precise production and packaging quality. They have a wide variety of distribution outlets in India and have gained access to the remotest of locations through a variety of stores. It is anticipated that ITC will increase its involvement in the eastern market for spices due to its most recent acquisition of Sunrise Foods Pvt Ltd.
The company is nearly debt free and has been maintaining a debt payout of 92%. Over the past five years, the revenue had a CAGR of 7% and net income has had a CAGR of 8%. The company has delivered a poor sales growth of 10% over the past five years. ITC stock has given a decent return of 72% over the past 5 years.
3. Nestle India Ltd.
Nestle India Ltd. is a dominant company in the Indian FMCG market with a strong market presence in the majority of its product categories. The business, which sells various goods under the Maggi brand is a trendsetter in the food service industry. In terms of dairy and nourishment products (96% in infant cereals), drinks (Nescafe 51%), processed foods (Instant Pasta Maggi -69%), kitchen aids (Nestle everyday 44%), and confectionery (63%). The company markets its products under the EVERYDAY, NESCAFE, NESTEA, Maggi, KitKat, Munch, Nestle, POLO, Bar-One, Milkmaid, Milkybar, Alpino, and Eclairs brands, among others.
Nestle India’s revenue has given a CAGR of 11.5% over the past 5 years while the net income has grown at a CAGR of 14%. The company has maintained a healthy dividend payout of about 91%. However, it has delivered poor sales growth of 11.0% over the past five years. The company’s stock has jumped 123% over the past five years.
4. Britannia Industries Ltd.
Britannia Industries has a rich 100-year history. It is one of the major leaders in the Indian biscuit industry with a market share of more than one-third in terms of value. The company’s portfolio has a good proportion of each of the seven varieties of biscuits it produces, including glucose, Marie, cookies, crackers, cream, milk, and health. Additionally, the company’s whole product line includes recognisable trademarks including Milk Bikis, Tiger, Marie, and Good Day.
Over the past five years, revenue and net income have seen a decent CAGR of 9.3% and 11.5%, respectively. Despite maintaining a high dividend distribution of 123%, the company’s growth in sales over the previous five years was just 10.5%. Britannia’s shares have risen 61% in 5 years.
5. Varun Beverages Ltd.
Varun Beverages Ltd (VBL) is engaged in the manufacturing, sales, and distribution of PepsiCo’s beverages in pre-defined territories in India. The company is PepsiCo India’s second-largest international franchisee (after the United States) for carbonated soft drinks and non-carbonated beverages. VBL is a part of the RJ Corp group, a commercial conglomerate with holdings in quick-service restaurants, dairy products, and healthcare. Some of the key brands sold under VBL include Pepsi, Mirinda, Mountain Dew, Seven-Up, etc. In addition, the company offers its products in Nepal, Sri Lanka, Morocco, Zimbabwe, Zambia, and Mozambique.
The company has reported an impressive revenue CAGR of 27% and a net income CAGR of 48% over the past 5 years. It has delivered good profit growth of 49.2% CAGR over the last 5 years. It has been maintaining a healthy dividend payout of 17.5%. However, promoter holding has decreased by about 4% over the last 3 years. The stock has given a spectacular return of 696% in the past 5 years.
Other Top FMCG Stocks in India:
Marico
Dabur India
Godrej Consumer Products
Colgate Palmolive
Tata Consumer Products
Jyothy Labs
In conclusion, India’s FMCG market is expanding quickly. Consumers are increasingly choosy and willing to pay more money for high-quality goods than low-quality ones. The FMCG market has expanded as a result of the rising demand for branded goods. It has grown faster in rural India than in urban India as a result of the expanding number of FMCG startups. The semi-urban and rural sectors are also experiencing rapid growth for these publicly listed FMCG firms in India. This makes FMCG one of the strongest sectors with very high potential. And now you know which are the top FMCG stocks in India you could invest in!
Disclaimer: The stocks mentioned in the article are solely for educational purposes. Please do your own research before investing.
Tata Steel reported an 82% YoY fall in consolidated net profit to Rs 1,705 crore for Q4 FY23. Its revenue from operations also fell 9% YoY to Rs 62,961 crore during the same period. EBITDA stood at Rs 7,225 crore in Q4 FY23, compared to Rs 5,174 crore in Q4 FY22. The company’s board has recommended a dividend of Rs 3.6 per equity share.
Maruti Suzuki India posted a 6.5% year-on-year (YoY) increase in wholesale sales to 1.61 lakh units in April 2023. Sales of its mini & compact vehicle segment rose 16.7% YoY to 89,045. Exports fell 7.8% YoY to 16,941 units.
Tata Motors Ltd registered a 13% YoY increase in passenger vehicle sales to 47,107 units in April. The automaker’s commercial vehicle sales declined by 6% YoY to 6,984 units.
Mahindra & Mahindra’s total passenger vehicle segment posted total sales of 34,698 units in April, an increase of 54% YoY. M&M’s tractor sales fell 11% YoY to 36,405 units.
TVS Motor Company’s total sales stood at 3.06 lakh units in April, up 4% YoY. Meanwhile, Bajaj Auto’s sales rose 11% YoY to 2.8 lakh units.
NMDC iron ore output rises 11.42% to 3.51 MT in April
NMDC Ltd reported an 11.42% rise in its iron ore production of 3.51 million tonnes (MT) in April 2023. It produced 3.15 MT of iron ore in the same month last year. The state-owned company is also involved in the exploration of a wide range of minerals like copper, rock phosphate, limestone, dolomite and gypsum.
Adani Total Gas Q4 Results: Profit rises 21% YoY to Rs 98 crore
Adani Total Gas reported a 21% YoY increase in consolidated net profit at Rs 98 crore for Q4 FY23. Operating revenue stood at Rs 1,197 crore, a 12% increase from Q4 FY22. ATGL’s operating profit rose 45% to Rs 205 crore. The company’s board approved a dividend of Rs 0.25 per equity share.
Suzlon secures 69.3 MW wind energy project from Juniper Green Energy
Suzlon has secured an order from Juniper Green Energy to develop a 69.3 megawatts (MW) wind power project. The project is located in Surendra Nagar district in Gujarat and is expected to be commissioned in 2024. As part of the agreement, Suzlon will supply the wind turbines (equipment supply) and execute the project including, erection and commissioning.
USFDA halts Sun Pharma’s trials on dermatological drug
The US Food & Drug Administration (FDA) has asked Sun Pharmaceutical Industries Ltd to halt tests on one dose of an experimental dermatological drug due to the potential of blood clots. The FDA has also said that patients with alopecia areata (an autoimmune condition that results in patchy hair loss) on the 12 mg dose of deuruxolitinib should discontinue its use.
Ambuja Cements Q4 Results: Net profit rose 2% YoY to Rs 502 crore
Ambuja Cements reported a 1.6% YoY rise in standalone net profit to Rs 502 crore for Q4 FY23. Operating revenue stood at Rs 4,256 crore, an 8% increase from Q4 FY22. EBITDA for the quarter stood at Rs 788 crore, compared to Rs 793 crore in Q4 FY22. The company’s board approved a dividend of Rs 2.5 per equity share.
Varun Beverages Q4 Results: Net Profit rises 69% YoY to Rs 429 crore
Varun Beverages reported a 69% YoY increase in consolidated net profit to Rs 429 crore for Q4 FY23. Its operating revenue for the quarter increased 37.8% YoY to Rs 3,952 crore. EBITDA rose 50.3% YoY to Rs 798 crore. The company’s board also announced a 1:2 stock split subject to the approval of shareholders.
Minda Corp to acquire additional 8.8% stake in Pricol
Minda Corporation has filed an application with the Competition Commission of India (CCI) to increase its stake in Pricol Ltd. to 24.5%. It had acquired 15.7% of Pricol’s equity earlier this year, but stated that it was only a financial investment with no special rights. As of December last year, Pricol was a debt-free company and even had free cash flow worth Rs 112.2 crore as of financial year 2022.
India’s unemployment rate surges to 4-month high in April
India’s unemployment rate rose to 8.11% in April from 7.8% in March, the highest since December. Urban unemployment increased from 8.51% to 9.81% in the same period, while in rural areas, it fell marginally from 7.47% a month ago to 7.34% in April. India’s labour force increased by 25.5 million people to 467.6 million in April, possibly due to an “increase in optimism about finding employment.”
Here are some of the major updates that could move the markets tomorrow:
Infosys Q4 Results: Net profit rises 8% YoY to Rs 6,128 crore
Infosys reported an 8% year-on-year (YoY) growth in consolidated net profit to Rs 6,128 crore for the quarter ended March 2023 (Q4 FY23). Consolidated revenue for the period increased by 16% YoY to Rs 37,441 crore. The IT company missed analysts’ estimates for both revenue and profit. The company’s operating margin contracted by 50 basis points sequentially to 21%. Infosys’ board has approved a final dividend of Rs 17.50 per share.
Passenger vehicle sales in India up 26.7% in FY23: SIAM
India’s passenger vehicle sales grew 26.7% in the financial year 2022-23 as chip shortages eased and demand for sport utility vehicles (SUVs) surged. Wholesale passenger vehicle volumes for the year rose from 3.1 million units in FY22 to 3.9 million units in FY23. Domestic wholesales of passenger vehicles grew 4.7% YoY in March at 2,92,030 units. Two-wheeler sales clocked 12,90,553 units in the domestic market last month, as compared to 11,98,825 units in the year-ago period.
Fasal partners with SBI to help farmers get easy access to loans
Agri-tech company Fasal is partnering with the State Bank of India (SBI) to provide farmers with easy access to capital. The partnership will help solve cash-flow constraints during key cycles in farming by providing quick, easy, and collateral-free loans at very competitive rates. Through Fasal’s latest financing solution, farmers can access collateral-free loans up to three lakhs.
RBI begins evaluating potential bidders for IDBI Bank
The Reserve Bank of India (RBI) has begun evaluating at least five potential bidders interested in picking up a majority stake in state-owned IDBI Bank Ltd. Kotak Mahindra Bank, CSB Bank, and Emirates NBD are among those that have submitted expressions of interest (EoIs). However, it is not verified or confirmed. It is the first major divestment across state-owned banks as part of a broader privatisation plan. This could fetch the government $3.66 billion at the current market valuation. The government owns 45.48% of IDBI Bank, and is looking to divest a 30.48% stake.
IOCL, Adani-Total, and Shell acquire Reliance’s KG-D6 gas
Indian Oil Corporation Ltd (IOCL), Adani-Total Gas Ltd, and Shell were among the 29 companies that successfully bid for natural gas from Reliance Industries Ltd and BP’s KG-D6 block. In the e-auction held on Wednesday, IOCL secured nearly half of the 6 million standard cubic meters per day of gas, followed by state-owned gas utility GAIL, Adani-Total Gas Ltd, Shell, GSPC, and IGS. The auction incorporated the government’s new marketing rules, prioritizing supplies to CNG-selling city gas companies.
Coal India boosts coking coal output, production up 17 %
Coal India Ltd has reported a 17.2% increase in coking coal production, which helped reduce the country’s reliance on coal imports for iron and steel production. Coking coal production reached 54.6 million tonnes (MT) in FY23, marking a substantial year-on-year growth compared to 46.6 million tonnes in FY22. CIL’s subsidiaries based in Jharkhand were major contributors to the increased production.
Jindal Steel and Power Ltd (JSPL) announced plans to more than double its rail-making capacity to 2.2 million tonnes (MT) by setting up a new rail mill with an annual capacity of 1.2 MT in Angul, Odisha. The company did not disclose the exact investment figures, but sources estimate it to be in the range of Rs 2,500 crore to Rs 3,000 crore. JSPL is also supplying 260-meter rails to Indian Railways, dedicated freight corridors, and other critical projects of national importance from its Raigarh mill.
Kolte-Patil Developers reports highest ever pre-sales at Rs 2,232 crore in FY23
Kolte-Patil Developers Ltd has recorded its highest-ever annual pre-sales of 3.27 million square feet, valued at Rs 2,232 crore, for FY23. During the quarter, the company achieved sales of Rs 704 crore, showing a growth of 41% YoY. Additionally, strong volume growth of 25% contributed to the sales numbers for the quarter. The company also reported collections at the highest-ever levels for the year and quarter at Rs 1,902 crore and Rs 589 crore, respectively, indicating healthy cash-flow generation.
Varun Beverages to consider a stock split on May 2
Varun Beverages Ltd (VBL) will consider a stock split on May 2, 2023. The company has previously given 1:2 bonuses three times in the last four years. The goal of the stock split is to make the shares more accessible to retail investors and improve liquidity. VBL supplies PepsiCo products to over 100,000 retail outlets. The company’s stock has been performing well in the market, and the stock split may further enhance its appeal to investors.
Varun Beverages is the company that bottles drinks on behalf of PEPSICO. Drinks like Pepsi, Tropicana, Mountain Dew, 7Up, Lipton Ice Tea, Aquafina, or Gatorade are names we have all heard. Varun Beverages has come out with a stellar performance for the April-June quarter of 2021, right after the second wave of COVID-19 retracted. [The company follows the January-December financial year cycle]
In this piece, we cover the business model of Varun Beverages, its performance this quarter, and what lies ahead for the company.
About Varun Beverages Limited (VBL)
Established in 1995, VBL is the largest bottler of PepsiCo drinks outside the US. Till 2019, PepsiCo had partnered with VBL in its bottling and distribution till it completely handed over the bottling business to VBL. As of now, VBL looks after the manufacturing of the sweeteners as well as the bottling of its products. Apart from India, VBL also operates in Sri Lanka, Zambia, Zimbabwe, and Morocco.
VBL has a robust supply chain with 90+ depots, 2,500+ owned vehicles, 1,500+ primary distributors all across India, Nepal, and Sri Lanka.
India’s consumption of soft drinks is 44 bottles per capita, whereas, for countries like the United States, the per-capita consumption is 1,496 bottles. India, a country with 1.3 billion people, has a larger market to penetrate that can surpass that of the United States. Varun Beverages is looking to expand into the Indian rural and semi-urban areas where the market penetration is less.
VBL’s product segments include – Carbonated Soft Drinks (CSD), Juice, and Water. Following is the sales volume breakup for the quarter ended June 30:
Segment
% of Revenue
Carbonated Soft Drinks (CSD)
78%
Non-carbonated Beverages
7%
Packaged Drinking Water
15%
Q2 CY21 Results: The Finances
.
Jun-2021
Mar-2021
QoQ%
Jun-2020
YoY%
Revenue
2,507.5
2,246.6
11.61%
1,642.8
52.63%
Net Profit
308.2
129.3
138.42%
140.8
118.9%
All Amount In Indian Rupee Crore
VBL registered total revenue of Rs 2,507 crore in Q2 CY21. This was an 11.61% growth from last quarter (QoQ) and a 52.63% growth since one year (YoY).
The company saw a three-digit growth in profit numbers. Profit was up by 138.42% QoQ and 118.9% (YoY) to Rs 308.2 crore.
Total expenses up by 40.4% (YoY) at Rs 2,087.79 crore in Q2 CY21 versus Rs 1,486.49 crore in the same quarter of 2020.
The company has announced an interim dividend of Rs 2.50 per equity share for the financial year 2021 on equity shares of the nominal value of Rs 10 each.
What Lies Ahead
The repayment of debt as well as the lower average cost of borrowing translated into a reduction in finance costs during the quarter. The company was able to reduce its debt by more than Rs 600 crore from March 31, 2020, to March 31, 2021.
Apart from handling North and East regions, VBL took over the operations of the South and West regions in Feb 2019. One year later, the COVID-19 pandemic hit the world and the company couldn’t utilize the potential of the new acquisition.
Right when sales volume had picked up in Q4 2020, the second wave hit the country as well as the sales volume of the company. Unlike the first wave, the supply chain wasn’t much of a problem. The situation isn’t as bad as last time since lockdowns were localized this time. Later on, the sales picked up the lockdown eased in June 2021.
From the earnings call of the company, the following factors could possibly drive growth in the next quarter:
As lockdowns gradually subside and COVID-19 cases decline, sales are likely to go up.
Growing refrigeration facilities in rural/semi-rural areas.
Increased volumes in Southern and Western regions
Volumes recovering in international business.
After the results, the share price of VBL closed ~4% above the previous day’s close. The company has given a return of ~60% over the past one year. Have you invested in VBL? If not, do you plan to invest?. You can let us know in the comment section in the marketfeed app.
Manufacturing PMI recovers to 3-Month high in July
Manufacturing activity in India expanded after a month in July as local lockdowns imposed to curb the second wave of the Covid-19 pandemic eased. The IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) stood at 55.3 in July, compared with 48.1 in June. This is the fastest pace of growth in three months. PMI is a month-on-month calculation, and a value above 50 represents an expansion when compared to the previous month.
Meanwhile, India’s unemployment rate fell to 6.95% in July, compared to 9.17% in the previous month.
HDFC Q1 Results: Net profit falls 1.7% YoY to Rs 3,001 crore
Housing Development Finance Corp (HDFC) reported a 1.69% YoY decline in standalone net profit to Rs 3,001 crore for the quarter ended June (Q1 FY22). Net profit has declined by 5.6% when compared to the previous quarter. Its net interest income (NII) grew 22.2% YoY (or 2% QoQ) to Rs 4,147 crore during the same period. HDFC’s assets under management (AUM) rose 8% YoY to Rs 5.74 lakh crore in Q1.
India’s largest car manufacturer, Maruti Suzuki India, posted a 10.2% month-on-month (MoM) increase in total sales to 1.62 lakh units in July 2021. Sales from its utility vehicle segment and exports grew 26.6% and 24%, respectively.
Tata Motors Ltd registered a 25% MoM increase in passenger vehicle sales to 30,185 units in July. The automaker’s commercial vehicle sales increased 8% MoM to 23,848 units. Overall domestic sales rose 19% MoM to 51,981 units.
Mahindra & Mahindra’s passenger vehicles division posted total sales of 21,046 units in July, an increase of 24.43% over June. M&M’s farm equipment segment posted a 43.53% decline in sales to 27,229 units.
Two and three-wheeler manufacturer TVS Motor Company posted a 10.7% MoM increase in total sales to 2.78 lakh units. Meanwhile, Hero MotoCorp posted a 3% MoM decline in total sales to 4,54 lakh units in July.
Emami Q1 Results: Net profit rises 96% YoY to Rs 77.79 crore
Emami Ltd reported a 96.4% YoY increase in consolidated net profit to Rs 77.79 crore for the quarter ended June (Q1 FY22). Its revenue from operations rose 37.3% YoY to Rs 660.95 crore during the same period. Net profit and revenues have declined by 11.3% and 9.6%, respectively, when compared to the previous quarter. The FMCG company’s EBITDA grew 38% YoY to Rs 170 crore in Q1.
Ambuja Cements to invest Rs 310 crore to expand Ropar unit in Punjab
Ambuja Cements Ltd will invest Rs 310 crore to expand the production capacity of its plant at Ropar, Punjab. This investment is part of the company’s aim to have a total cement capacity of 50 million tonnes per annum (MTPA) in the mid-term. The expansion of the Ropar plant is expected to be completed by June 2023. The total capacity of the cement grinding unit will increase from 3 MTPA to 4.5 MTPA.
Punjab National Bank Q1 Results: Net profit jumps 232% YoY to Rs 1,023 crore
Punjab National Bank (PNB) reported a 232% YoY jump in standalone net profit to Rs 1,023 crore for the quarter ended June (Q1 FY22). Net profit has increased by 75% when compared to the previous quarter. Its net interest income (NII) rose 6.5 % YoY to Rs 7,226 crore during the same period. The gross non-performing assets ratio (GNPA) increased to 14.33% in Q1 FY22, compared to 14.12% in Q4 FY21.
ABB India partners with Audi to provide charging solutions
ABB India Limited has announced a partnership with Audi India to provide charging solutions for the automaker’s fully electric ‘e-tron’ range. The newly launched Audi e-tron and Audi e-tron Sportback will be offered with ABB India’s Terra AC wall-box charger for smart charging at home. The Terra AC wall-box charger is capable of delivering 11 kilowatts (kW) power to the Audi e-tron and companies with all safety standards and necessary certifications.
Varun Beverages Q2 Results: Net profit jumps two-fold to Rs 319 crore
Varun Beverages Ltd (VBL) reported a 123% YoY jump in consolidated net profit to Rs 318.8 crore for the quarter ended June (Q2 CY21). The company follows the January-December financial year cycle. Its revenue from operations rose 49.4% YoY to Rs 2,449.85 crore during the same period. The total sales volume increased by 45.4% YoY to 152.3 million cases in Q2 CY21. VBL’s board has recommended an interim dividend of Rs 2.5 per share.
Policybazaar files DRHP to raise Rs 6,017 crore via IPO
PB Fintech has filed a Draft Red Herring Prospectus (DRHP) with market regulator SEBI to raise Rs 6,017 crore via an initial public offering (IPO). It is the parent company of Policybazaar and Paisabazaar. The IPO will consist of a fresh issue of shares aggregating to Rs 3,750 crore and an offer for sale (OFS) by existing promoters, aggregating to Rs 2,267 crore. Policybazaar is one of India’s largest online insurance marketplaces.
RBL Bank reported a net loss of Rs 459 crore for the quarter ended June (Q1 FY22). The private sector lender had posted a net profit of Rs 141 crore in Q1 FY21. Its net interest income fell 7% YoY to Rs 1,041 crore in Q1 FY22. [NII is the difference between the interest income a bank receives on loans and the interest it pays to depositors]. The gross non-performing assets (GNPA) ratio increased to 4.99% in Q1 FY22, compared to 4.34% in Q4 FY21 (previous quarter).
Manufacturing activity in India remained steady in April despite the devastating surge in Covid-19 cases amidst the second wave. The IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) stood at 55.5 in April, compared with 55.4 in March. This is the eighth straight month that PMI has remained in the expansion zone. Consumer goods were the strongest-performing category in April, followed by capital goods and intermediate goods. PMI is a month-on-month calculation, and a value of more than 50 represents an expansion when compared to the previous month.
Kotak Mahindra Bank Q4 Results: Net profit rises 33% YoY to Rs 1,682 crore
Kotak Mahindra Bank reported a 33% YoY increase in net profit to Rs 1,682 crore for the quarter ended March (Q4). Net interest income (NII) rose 8% YoY to Rs 3,843 crore during the same period. [NII is the interest income a bank receives on assets such as loans, and the interest it pays to depositors] The gross non-performing assets (NPAs) ratio fell 3.25% in Q4, compared with 3.27% in the preceding quarter (Q3 FY21). Kotak Bank’s total deposits rose 6.5% YoY to Rs 2.8 lakh crore in Q4.
Natco Pharma gets emergency use approval for Baricitinib tablets for Covid-19 treatment
Natco Pharma has received emergency use approval for Barcitinib tablets from the Central Drugs Standard Control Organization (CDSCO). Baricitinib is used in combination with Remdesivir for the treatment of Covid-19 positive patients. Natco will be requesting a Compulsory License based on emergency use in light of the serious public health emergency across India due to the Covid-19 pandemic. The pharma company will launch the product within a week.
IDBI Bank Q4 Results: Net profit jumps 278% YoY to Rs 512 crore
IDBI Bank reported a 278% YoY jump in net profit to Rs 512 crore for the quarter ended March (Q4). On a quarterly basis, net profit has increased by 35%. Net interest income (NII) rose 38% YoY to Rs 3,240 crore during the same period. The gross non-performing assets (NPAs) ratio stood at 22.37%, compared with 24.33% in Q3 FY21. IDBI Bank’s total deposits have increased by 4% YoY to Rs 2.3 lakh crore in FY21.
NMDC reports 124% YoY jump in iron ore sales in April
NMDC Limited reported a 124% YoY increase in iron ore sales to 3.09 million tonnes (MT) in April 2021. The state-owned miner had posted iron ore sales of 1.38 MT during the corresponding month last year. The company’s iron ore production jumped 74% YoY to 3.13 MT in April 2021. On a quarterly basis, iron ore production has declined 31.5%, while sales fell 24.26%.
Godrej Properties Q4 Results: Net loss at Rs 192 crore
Godrej Properties Limited (GPL) reported a net loss of Rs 191.62 crore for the quarter ended March (Q4 FY21). It had posted a net profit of Rs 102 crore in the corresponding period last year (Q4 FY20). The company’s revenue declined 60% YoY to Rs 508 crore in Q4 FY21. The real estate developer recorded its highest-ever quarterly collection of Rs 2,041 crore and a net operating cash flow of Rs 785 crore in Q4. Total booking value increased by 10% YoY to Rs 2,632 crore.
JSW Energy’s subsidiary signs PPA with SECI for supply of 540 MW wind energy
JSW Renew Energy, a wholly-owned subsidiary of JSW Future Energy Ltd, has signed a power purchase agreement (PPA) with Solar Energy Corporation of India (SECI) for the supply of 540 MW from a total blended wind capacity of 810 MW. This PPA marks JSW Energy’s entry into the wind or blended wind energy generation segment. In September 2020, JSW Future Energy had received Letter of Awards (LoAs) for a total blended wind capacity of 810 MW in respect to the tariff-based competitive bids invited by SECI for setting up 2,500 MW Inter-State Transmission System (ISTS)-connected blended wind power projects.
SBI Life Insurance Company reported a flat net profit of Rs 532 crore for the quarter ended March (Q4). It had posted a net profit of Rs 531 crore in the corresponding period last year (Q4 FY20). Net premium income (NPI) rose 31% YoY to Rs 15,556 crore in Q4 FY21. For the financial year ended March 31, 2021 (FY21), net profit has increased by 2% YoY to Rs 1,456 crore. The company’s board has declared an interim dividend of Rs 2.5 per share.
Varun Beverages Q1 Results: Net profit jumps 127% YoY to Rs 136 crore
Varun Beverages Limited (VBL) reported a 127.7% YoY increase in consolidated net profit to Rs 136.76 crore for the quarter ended March (Q1 CY21). The company follows the January-December financial year cycle. Its revenue from operations rose 33.7% YoY to Rs 2,240.89 crore during the same period. Total sales volume grew 32.8% YoY to 15.1 crore cases in Q1 CY21. VBL’s board has announced a bonus issue in the ratio 1:2. [This means that one additional share will be issued for every two shares held by a shareholder of the company]
Tata Chemicals Q4 Results: Net profit falls sharply to Rs 11.77 crore
Tata Chemicals Limited reported a 99.8% YoY (or 93% QoQ) decline in consolidated net profit to Rs 11.77 crore for the quarter ended March (Q4). Its total revenue rose 10.85% YoY to Rs 2,636 crore during the same period. The company’s basic chemistry products segment posted a 5.6% YoY growth, while the specialty chemicals segment saw a growth of 38% YoY. Tata Chemicals’ board has announced a dividend of Rs 10 per share.
Motherson Sumi’s subsidiary completes acquisition of Bombardier’s electric wiring business
Motherson Sumi Systems Ltd (MSSL) has completed the acquisition of Bombardier’s electric wiring business (which is based in Mexico). The acquisition was done by MSSL’s Mexican subsidiary— Motherson Rolling Stock Division (MRS). The assets and activities at Bombardier’s manufacturing site at Huehuetoca, Mexico (BT Ensambles México) have now been taken over by MRS.
We are pretty sure that you may have tried out Pepsi, Tropicana, Mountain Dew, 7Up, Lipton Ice Tea, Aquafina, or Gatorade many times in your life. All of them are licensed drinks of PepsiCo, the multinational food and beverage company, with a presence in almost 200 countries. In India however, a single company creates and bottles these drinks on PepsiCo’s behalf, and that is Varun Beverages Pvt. Ltd. (VBL).
With a market capitalization of Rs 26,214 crores, Varun Beverages Pvt. Ltd. has bottling plants in every corner of the country. It initially started out as a small franchisee of PepsiCo in India until 2019, when it bought out PepsiCo India’s South and West business and also bagged the rights to distribute PepsiCo drinks across India.
A Little About VBL
Established in 1995, Varun Beverages (VBL) is the largest bottler of PepsiCo drinks outside the US. Till 2019, PepsiCo had partnered with VBL in its bottling and distribution till it completely handed over the bottling business to VBL. As of now, VBL looks after the manufacturing of the sweeteners as well as the bottling of its products. Apart from India, VBL also operates in Sri Lanka, Zambia, Zimbabwe, and Morocco.
VBL’s product segments include – Carbonated Soft Drinks (CSD), Juice, and Water. Of the company’s total revenue, CSD contributes 75.6%. Non-carbonated beverages contribute 6.4% and Packaged drinking water 18.0%.
VBL has a robust supply chain with 90+ depots, 2500+ owned vehicles, 1500+ primary distributors all across India, Nepal, and Sri Lanka.
Varun beverages got listed on BSE and NSE on November 08, 2016.
VBL’s Operations Across India, Nepal and Sri Lanka(Source: Company Website)
Key Financials
Since VBL was listed on NSE and BSE in 2016, its share price has appreciated by ~231%(as of February 2021).
VBL’s sales volume has grown with a CAGR of 19.7% over the past 5 years. COVID-19 lockdown impacted sales volume and was down by 50% in India. However, this fall wasn’t peculiar to the company as the lockdown has impacted the global economy overall.
Its revenue has grown at a CAGR of ~20.8% over the past 5 years and the Profit After Tax has grown at 52.6% CAGR over the past ~52.6%.
The company’s Debt/Equity ratio has decreased over the past 3 years, which means that the company is cutting down on its debt and optimally utilizing the borrowed money.
VBL’s cash flow from operations increased by ~24% over the past 5 years and it can grow further, given the high potential for carbonated soft drinks in India.
The FII or Foreign Institutional Investors’ stake has increased by 8% over the past 3 years. This shows confidence in VBL from the international market.
Why VBL?
Great Potential
India’s consumption of soft drinks is 44 bottles per capita, whereas, for countries like the United States, the per-capita consumption is 1,496 bottles. India being a country with 1.3 Billion people has a larger market to penetrate which can surpass that of the United States. VBL is looking to expand into rural and semi-urban areas where the market penetration is less.
Recovering Demand
During the COVID-19 lockdown, due to curtailment of movement, people preferred buying larger bottlers of 1.25L of soft drinks which lasted longer. This added to the profit margin of VBL. Furthermore, as countries return to normalcy from the COVID-19 pandemic with the COVID-19 vaccine already in sight, demand is shooting up. There lies a great potential for the soft drinks market.
VBL has narrowed its loss to Rs 7 crore, the share prices did not react well, yet analysts suggest that there is huge upside potential. VBL is making a shift in production to the Non-Carbonated Drinks (NCD) segment. As electrification in rural areas increases and so does refrigeration capacity per household, the demand for cold drinks will also increase. VBL’s share price has grown ~30%, while NIFTY FMCG had grown ~10% in the last 1 year. The stock has outperformed the index and is in a relatively better position than its other competitors.VBL is a company that is expected to grow strong in the future. Its polished supply chain, strong financial health, and increasing market coverage make it a well-polished company overall.
Conclusion
So if you have always looked at brands like PepsiCo and wished to invest in them, this is the best thing you can get in India. Go checkout the annual reports of Varun Beverages Ltd, you will either invest in the stock or at least will walk away with a lot of new knowledge of the beverage industry. Definitely a win-win in my opinion!
Nestle India Q4 Results: Net profit rises 2% YoY to Rs 483 crore
Nestle India reported a 2.25% YoY increase in net profit to Rs 483.3 crore for the fourth quarter ended December (Q4). The company follows the January-December financial year cycle. Its revenue grew 9% YoY to Rs 3,432.6 crore during the same period. Nearly two-thirds of the company’s key brands like Maggi Noodles, Kitkat, and Nescafe Classic posted double-digit growth last year. Nestle’s board has declared an interim dividend of Rs 65 per share.
Adani Ports completes acquisition of Dighi Port for Rs 650 crore
Adani Ports and Special Economic Zone Ltd (APSEZ) has completed the acquisition of debt-ridden Dighi Port for Rs 650 crore under the bankruptcy law. The resolution plan submitted by APSEZ also includes the settlement of unpaid dues of Rs 11.39 crore to the Maharashtra Maritime Board. With this acquisition, APSEZ has expanded its presence to 8 out of the 9 Indian coastal states.
Varun Beverages Q4 Results: Net loss at Rs 7.2 crore
Varun Beverages Ltd reported a net loss of Rs 7.2 crore for the fourth quarter ended December (Q4). It had posted a net loss of Rs 54 crore in the corresponding period last year (Q4 CY20). The company follows the January-December financial year cycle. Revenue increased 9% YoY to Rs 1,351.3 crore in Q4. Varun Beverages is a key player in the beverage industry and one of the largest franchisees of PepsiCo in the world (outside USA).
Axis Bank-United India Insurance case settled for Rs 41.43 lakh: SEBI
The Securities and Exchange Board of India (SEBI) announced that the Axis Bank-United India Insurance case has been settled for Rs 41,43,750. The case pertained to alleged lapses in disclosures with respect to change in promoter’s shareholding in Axis Bank. The entities were alleged to have violated Prohibition of Insider Trading (PIT) norms.
Biocon Biologics to partner with International Diabetes Federation
Biocon Biologics, a subsidiary of Biocon Ltd, has partnered with the International Diabetes Federation (IDF) to promote and support IDF’s core mission initiative and activities. It will be the first biosimilar insulin company to partner with IDF. This partnership takes forward Biocon Biologics’ mission of enabling affordable access to insulins to people with diabetes worldwide.
BankservAfrica selects TCS BaNCS for payment solutions
Tata Consultancy Services (TCS) announced that South African Bankers Services Company Proprietary (BankservAfrica) has selected TCS BaNCS to drive the Rapid Payments Program (RPP) in South Africa. RPP is a national initiative to introduce a next-generation, easy-to-use, real-time retail payments system for the growing payments ecosystem in South Africa. The TCS BaNCS solution will provide BankservAfrica with an ultra-high performance, low latency, and scalable solution to meet the needs of RPP.
Jubilant Foodworks forms subsidiary in Netherlands
Jubilant Foodworks Ltd has formed a wholly-owned subsidiary in the Netherlands to explore business opportunities in the food service industry in the European country. The subsidiary, known as Jubilant Foodworks B.V., was incorporated on February 15, 2021. Jubilant Foodworks operates fast-food chains such as Domino’s Pizza, Dunkin’ Donuts in India.
Nureca IPO subscribed 15 times on second day of bidding
The Rs 100-crore initial public offering (IPO) of Nureca Limited was subscribed 14.77 times on the second day of bidding. The issue has received bids for 2.07 crore equity shares, as against an offer size of 14.01 lakh shares. The portion reserved for retail investors was subscribed 80.33 times, while that of employees was subscribed 2.49 times. The portion set aside for non-institutional investors witnessed a subscription of 1.49 times.
Infosys unit acquires New Business and Underwriting platform from STEP Solutions
Infosys McCamish Systems, a US-based subsidiary of Infosys BPM, has announced the strategic purchase of a state-of-the-art New Business and Underwriting platform from STEP Solutions Group LLC. The platform will help ease the complexity of all types of insurance products such as Life, Annuity, and Health for individuals and groups across North America. Infosys BPM is the Business Process Management arm of Infosys Limited.
RailTel IPO subscribed 2.63 times on first day of bidding
The Rs 820-crore initial public offering (IPO) of RailTel Corporation of India was subscribed 2.63 times on the first day of bidding. The issue received bids for 16.13 crore equity shares, as against an offer size of 6.11 crore shares. The portion reserved for retail investors was subscribed 4.99 times, while that of employees was 81% subscribed. The portion set aside for non-institutional investors witnessed a subscription of 75%.
Glenmark Pharma launches kidney cancer treatment drug in India
Glenmark Pharma has launched a generic kidney cancer treatment drug ‘Sunitinib Oral Capsules’ in India. The drug is priced approximately 96% lower compared to the innovator brand. Sunitinib is also approved by the US Food and Drug Administration (USFDA).
