VBL

’s Market Leadership and Expansion Plans Drive Re-Rating Potential

, PepsiCo’s key bottling partner in India, derives ~90% of domestic beverage volumes and has reinforced its competitive edge despite recent challenges. After a tough CY25 marked by weak weather conditions and rising competition from Reliance’s Campa brand, VBL expects a rebound in CY26, supported by favourable seasonality, category tailwinds, and a stronger product mix. With margins stabilising at ~26% and international expansion gaining traction, VBL remains well positioned for sustained growth. Operational Highlights - Core CSD portfolio: Accounts for 74% of consolidated sales; recent rebound underscores brand strength. - Hydration & value-added dairy: High-margin categories scaling up, aiding profitability. - Energy drinks: Expansion of Adrenaline Rush with new flavours and price points; innovation pipeline ahead of peak season. Domestic Outlook - CY25 volumes dampened by unseasonal rains; CY26 expected to benefit from favourable weather. - Double-digit India sales growth target maintained for CY26. - Inventory discipline and new launches to leverage seasonal demand. - Competition: Campa gained double-digit share, pressuring margins, but VBL sees limited long-term threat given low CSD penetration. International Expansion - Morocco snacks facility and Zimbabwe plant operational, diversifying beyond beverages. - Strategic partnership with Carlsberg to distribute beer in Africa adds new growth lever. - Management expects international EBITDA margins to converge with domestic levels in 2–3 years, aided by backward integration. Valuation & Risks - Valuation: ~35x CY27 earnings, reasonable given growth visibility. - Risks: Adverse weather, competitive intensity, delays in acquisitions. - Upside drivers: Seasonal tailwinds, premiumisation, operating leverage, and global scale-up. - With strong domestic leadership and international diversification, VBL is a tactical pick for re-rating potential.