This Largecap Stock generated 6.5x returns in the last 5 years

Midcap and smallcap stocks outperform in medium to long term. However, midcap stocks can become bluechip or largecap stocks if they are aggressively grow in terms of sales and profits. One midcap stock turned into largecap stock now few months back and generated highest returns of 6.5x returns in the last 5 years. Means if one would have invested Rs 1 Lakh, it would have now turned to 7.5 Lakhs. In this article, we would talk about Varun Breverages Limited, its financial performance, positive factors, risk factors of investing in this company and share price performance in the last 1 to 5 years time frame.

Also Read: This midcap stock generated 1000% returns in last 5 years

About Varun Breverages Ltd

Varun Beverages Limited produces, bottles and distributes beverages. It is the second largest bottling company of PepsiCo’s beverages in the world outside the United States.

It manufactures carbonated soft drinks, soft drinks, non alcoholic drinks and beverages and cold drinks.

Financial Performance of the company

Revenue grew from Rs 5,105 Crores in CY18 (Jan to Dec-18) to Rs 13,173 Crores in CY22 (Jan to Dec-22). Its latest quartely result for period ending Dec-22 indicate its revenus as Rs 2,214 Crores compared to previous year quarter revenues of 1,734 Crores.

Margins grew from Rs 296 Crores in CY18 to Rs 1,550 Crores in CY22. Its Dec-22 quarter profits are Rs 81 Crores Vs last year qtr ending Dec-21 profits of 32 Crores.

Its ROE is 33% and RoCE is 27.8%.

Its EPS increased from Rs 10.6 in CY18 to Rs 23.05 in CY22.

Positive Factors in this company

Strong revenue and margin growth in the last 5 years.

Company had strong annual EPS growth.

Improving net cash outflow in the last couple of years.

Brokers have upgraded the share price targets in recent times.

Stock is trading at P/E of 62x compared to industry P/E of 74x.

Currently, 29 mutual fund schemes invested 2.7% of the stake and 721 FPI and FII’s have invested for 25.3% of the stake in the company.

Share price showing strong momentum in the short term, medium term and long term and technical trend shows VERY BULLISH.

Negative Factors of investing in this company

The book value is Rs 78.6, means, stock is trading at 18.2 times its book value.

Book value per share is deteriorating in the last 2 years.

Promoter reduced their share holding by 5% in the last 3 years.

Low dividend yield of 0.07%.

Also Read: Top Low Risk and High Return Stocks to invest in 2023

How is the share price performance?

Its current market price of share is Rs 1,430. Let us look at how share price has performed in the last 5 years.

Last 3 months – 25% returns (1 Lakh turned 1.25 Lakhs)

Last 1 Year – 112% returns (1 Lakh turned 2.12 Lakhs)

Last 3 years – 480% returns (1 Lakh turned 5.8 Lakhs)

Last 5 years – 656% returns (1 Lakh turned 7.56 Lakhs)

Company board is planning to mull stock split on 2nd May, 2023. Currently this stock is trading at P/E of 62x compared to industry P/E of 74x. This stock moved from midcap category to largecap category few months back. Such stocks could be attractive during market corrections.

Disclaimer: This article is for educational purpose only. Investment in stocks are high risk. I keep doing research on various stocks that are outperforming, reasons behind it and post them on this blog so that investors can benefit with the analysis. Currently I do not own these shares, however might purchase them in near future. Please consult your financial advisor before investing in such stocks.

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Suresh KP


  1. Mr Suresh KP, I have been a big fan of you and due to your advice I invested Rs 2.5 lakhs in Quant Quantamental Fund. As such Varun Beverages is very costly. Can you please suggest some low priced small cap shares that have very good potential to grow in future. Further, mutual funds are not attracting me anymore. I am exiting Axis Bluechip shortly with in next 6 months. I am interested.

    1. 1) Regd Quant Quantamental Fund NFO – Here was my conclusion “Investors can give miss to such funds as of now”. Hence it nos my advice 🙂

      2) Stock markets have not gone anywhere in the last 1.5 years. If you have invested in above fund and thinking in 2 years you would make money, then you have chosen wrong option.

      3) Always invest based on risk appetite, financial goal and tenure. For short term of 2 years, these fluctuations are common.

      4) what ever I analyze on stocks, I keep posting post on this blog. I don’t recommend any stocks beyond that.

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