VBL is one of the largest franchisee of PepsiCo in the world. The Company produces & distributes a wide range of carbonated soft drinks (CSDs), variety of non-carbonated beverages (NCBs), including packaged drinking water sold under trademarks owned by PepsiCo.
(2/19)
Soft Drinks Market:
March-June is considered as the most important time for this business & we have seen both 1st & 2nd wave lockdowns taking place in these months. This had impacted the industry revenue.
However, the industry is delivering better numbers since then.
(3/19)
Key growth drivers for the industry:
1. Young Demography
2. Rapid urbanisation & growing middle class
3. Electrification across the country to help with the penetration of cooling infrastructure
4. India’s hot tropical climate
(4/19)
Let’s talk about VBL & PepsiCo:
The Company enjoys a strategic & longstanding over 30-year association with PepsiCo India, since the beverage company’s entry into India.
Today, it accounts for 85%+ of its sales volumes in India.
(5/19)
VBL has a sales team that collaborates closely with PepsiCo on local advertising & marketing campaigns.
The Company has been granted franchise rights for PepsiCo’s beverage products in 27 States & 7 UTs in 🇮🇳, in addition to Nepal, Sri Lanka, Morocco, Zambia & Zimbabwe.
(6/19)
Business Model of VBL:
PepsiCo offers brands, concentrates & marketing support to VBL. In turn, VBL takes complete control over the manufacturing & supply chain processes, managing capital allocation strategies & pricing decisions.
(7/19)
Current Capacity of VBL:
• VBL has 31 manufacturing facilities in India, & 6 globally.
• Further, it has a robust supply chain with 100+ owned depots, 2,500+ owned vehicles, 2,000+ primary distributors.
• It has installed 840,000+ visicoolers across various markets
VBL has plans to set up new facilities in Bihar and J&K. So they can grow in territories like Bihar, Odisha, Chhattisgarh, Jharkhand, & MP.
The mgmt believes they can grow at 35% CAGR in these regions.
(11/19)
2. Margin risk due to inflation almost covered:
VBL had taken a couple of steps to hedge the rising cost. One was by light weighting the preforms & the other was by increasing their inventory last year.
Thus VBL is confident of sustaining EBIT margins above 20%
(12/19)
3. Diversified Portfolio:
PepsiCo is periodically launching new products according to the market trends. Which is helping it to sustain in this market with healthy margins.
The premium product Sting is growing at 440% YoY & is contributing 5% of total sales vs ~1% YOY
• Production & logistics optimization including backward integration
• Use of technology to improve sales & operational process.
(14/19)
Other factors:
1. Economy unlocking in the main months of March to June.
2. Higher acceptance of newly launched products
3. Newly acquired south and west India market numbers is set to show better numbers after economy unlocking.
(15/19)
Key Risks:
1. Possible 4th Wave of Covid
2. Failure of acceptance of new products
3. Sustained rise in input prices
4. Price war with the competitors
5. If de leveraging doesn’t go according to the plan and Debt/EBITDA fails to fall below 1.5x
(16/19)
Key Numbers:
1. Net Sales up 36.8% YOY 2. EBITDA up 37.7% YOY 3. PAT up 108.8% YOY 4. EBITDA 5 year CAGR : 18.6% 5. Net Debt to Equity : 0.7x 6. PEG Ratio : 0.86 7. Int Coverage : 5.95 8. ROCE : 17.4% 9. 5 Year Sales CAGR : 21.8%
10.ROE : 18.6%
PVR Ltd is the country’s largest & most premium multiplex company, with a diverse portfolio of premium
formats across the length & breadth of the country, under its belt.
PVR was est in 1995 as a 60:40 JV between Priya Exhibitors Pvt Ltd & Village Roadshow Ltd. In 1995, PVR took a single-screen cinema hall, Anupam, in Delhi on lease & converted it into a 4-screen multiplex & started operations in 1997 as the first multiplex in 🇮🇳
DLL was incorporated in 1990 by Dr Murli K Divi. DLL is engaged in manufacturing of generic APIs, Nutraceutical, Custom
Synthesis of APIs & Intermediates for innovator companies
Divi's Lab is the leading manufacturer of APIs, supplying to over 95 countries.
(2/17)
Global Pharma Industry:
The pharma industry will be closely
monitored by govt in all countries in times to come.
The industry is expected to grow at 3–6% CAGR through 2025, reaching about $1.6 trillion in total
market size in 2025.
La Opala RG is a leading manufacturer & marketer of tablewares in 🇮🇳
It has the largest opal glassware tableware capacity in India.
It sells its opal ware products under two brands, La Opala (economy) & Diva (premium) & glassware under Solitaire brand (premium)
(2/13)
Distribution network:
La Opala being has a strong distribution network with close to 200 distributors & ~14,000 retail points vs peers with less than ~8,000 retail touchpoints. The company focuses on demand from semi-urban ~600 towns with a population of 1Lakh.
TV18 Broadcast is the broadcast arm of media conglomerate Network18 Media & Investments Ltd
TV18 operates the news channels like – CNBC TV18, CNBC Awaaz, CNBC Bajar, CNBC TV18 Prime HD, CNN News18, News18 India,
& 14 regional news channels
under News18 umbrella.
(2/21)
TV18 also operates a 51:49 JV with Viacom Inc., called Viacom18 Media pvt ltd.
Viacom18 houses a portfolio of
entertainment channels such as Colors, Rishtey, MTV India, MTV Beats, Comedy Central, Colors Infinity, Vh1, Nick, Sonic,
and Nick Jr & 10 regional ent channels.