VARUN BEVERAGES 2020-21 Annual Report Analysis

Fri, 31 Dec

VARUN BEVERAGES has announced its results for the year ended December 2021. Let us have a look at the detailed performance review of the company during FY20-21.

VARUN BEVERAGES Income Statement Analysis

• Operating income during the year rose 36.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 46.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 19.3% in CY21 as against 18.1% in CY20.
• Depreciation charges increased by 0.5% and finance costs decreased by 29.4% YoY, respectively.
• Other income grew by 84.6% YoY.
• Net profit for the year grew by 108.8% YoY.
• Net profit margins during the year grew from 5.6% in CY20 to 8.6% in CY21.

VARUN BEVERAGES Income Statement 2020-21

No. of Mths Year Ending		12 Dec-20*	12 Dec-21*	% Change
Net Sales	Rs m	63,445	86,882	36.9%
Other income	Rs m	370	683	84.6%
Total Revenues	Rs m	63,815	87,564	37.2%
Gross profit	Rs m	11,480	16,769	46.1%
Depreciation	Rs m	5,287	5,313	0.5%
Interest	Rs m	2,937	2,073	-29.4%
Profit before tax	Rs m	3,625	10,066	177.7%
Tax	Rs m	52	2,606	4,878.1%
Profit after tax	Rs m	3,573	7,461	108.8%
Gross profit margin	%	18.1	19.3
Effective tax rate	%	1.4	25.9
Net profit margin	%	5.6	8.6

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VARUN BEVERAGES Balance Sheet Analysis

• The company's current liabilities during CY21 stood at Rs 30 billion as compared to Rs 24 billion in CY20, thereby witnessing an increase of 24.0%.
• Long-term debt down at Rs 18 billion as compared to Rs 20 billion during CY20, a fall of 8.4%.
• Current assets rose 41% and stood at Rs 25 billion, while fixed assets rose 6% and stood at Rs 70 billion in CY21.
• Overall, the total assets and liabilities for CY21 stood at Rs 96 billion as against Rs 84 billion during CY20, thereby witnessing a growth of 13%.

VARUN BEVERAGES Balance Sheet as on December 2021

No. of Mths Year Ending		12 Dec-20*	12 Dec-21*	% Change
Networth	Rs m	35,240	40,799	15.8
Current Liabilities	Rs m	24,350	30,202	24.0
Long-term Debt	Rs m	19,796	18,133	-8.4
Total Liabilities	Rs m	84,474	95,795	13.4
Current assets	Rs m	17,997	25,461	41.5
Fixed Assets	Rs m	66,477	70,334	5.8
Total Assets	Rs m	84,474	95,795	13.4

VARUN BEVERAGES Cash Flow Statement Analysis

• VARUN BEVERAGES's cash flow from operating activities (CFO) during CY21 stood at Rs 12 billion, an improvement of 21.7% on a YoY basis.
• Cash flow from investing activities (CFI) during CY21 stood at Rs -10 billion, an improvement of 114.5% on a YoY basis.
• Cash flow from financial activities (CFF) during CY21 stood at Rs -2 billion, an improvement of 69% on a YoY basis.
• Overall, net cash flows for the company during CY21 stood at Rs 462 million from the Rs -334 million net cash flows seen during CY20.

VARUN BEVERAGES Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-20	Dec-21
Cash Flow from Operating Activities	Rs m	10,120	12,314	21.7%
Cash Flow from Investing Activities	Rs m	-4,711	-10,106	-
Cash Flow from Financing Activities	Rs m	-5,737	-1,777	-
Net Cash Flow	Rs m	-334	462	-

Current Valuations for VARUN BEVERAGES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 17.2, an improvement from the EPS of Rs 12.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 886.6, stands at 51.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.4 times, while the price to sales ratio stands at 4.4 times.
• The company's price to cash flow (P/CF) ratio stood at 32.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-20*	12 Dec-21*
Sales per share (Unadj.)	Rs	219.8	200.6
TTM Earnings per share	Rs	12.4	17.2
Diluted earnings per share	Rs	8.3	17.2
Price to Cash Flow	x	44.7	32.0
TTM P/E ratio	x	111.0	51.5
Price / Book Value ratio	x	6.1	10.0
Market Cap	Rs m	214,229	408,783
Dividends per share (Unadj.)	Rs	2.5	2.5

Ratio Analysis for VARUN BEVERAGES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.8x during CY21, from 0.7x during CY20. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 5.9x during CY21, from 2.2x during CY20. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 18.3% during CY21, from 10.1% during CY21. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 20.6% during CY21, from 11.9% during CY20. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 10.0% during CY21, from 7.7% during CY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-20*	12 Dec-21*
Current ratio	x	0.7	0.8
Debtors’ Days	Days	14	9
Interest coverage	x	2.2	5.9
Debt to equity ratio	x	0.6	0.4
Return on assets	%	7.7	10.0
Return on equity	%	10.1	18.3
Return on capital employed	%	11.9	20.6

To see how VARUN BEVERAGES has performed over the last 5 years, please visit here.

VARUN BEVERAGES Share Price Performance

Over the last one year, VARUN BEVERAGES share price has moved up from Rs 530.6 to Rs 1,005.9, registering a gain of Rs 475.4 or around 89.6%.

Overall, the S&P BSE SENSEX is up 74.1% over the year.

(To know more, check out historical annual results for VARUN BEVERAGES and quarterly results for VARUN BEVERAGES)

Read: Latest Annual Report Analysis of VARUN BEVERAGES