1. Buy or Sell at your own risk
2. Don't risk more than 1%-2% of your capital as stop loss
3. Position Size formula:- Stop Loss Amount/(Buy Price-Initial Stop Loss Price)
4. Sell on initial stop loss hit or daily RSI closing below 40
5. Some other ways to sell stocks can be
a. 25% or 50% up in three weeks or less
b. Weekly tailing tops with high volume
c. Exhaustion gaps
d. Heavy daily volume without further upside
e. Largest one day price drop
On 18th April 2022
VBL
gave a high volume breakout after a consolidation since November 2021. It will be a good buy if it comes down to the support zone of ₹1000 and ₹1040 with a stop at ₹990. It posted a very good set of numbers for the quarter ending on 31st March 2022. its quarterly sales increased by 26%, quarterly profit increased by 96%, TTM sales increased by 34% and TTM profit increased by 103%.
Other fundamentals:
1. Debt to equity at 0.82 (less than 1 is good), Interest Coverage at 7.75 (greater than 3 is good), Current ratio at 1.72 (greater than 1.5 is good).
2. The company has delivered good profit growth of 72.11% CAGR over last 5 years.
3. The company has been maintaining a healthy dividend payout of 17.64%.
4. The management of VBL Recommended the Bonus Issue of Equity Shares in the proportion of 1 (One) Equity Share of Rs. 10/- each for every 2 (Two) Equity Shares of Rs. 10/- each held by the shareholders of the Company.
5. Varun beverages is a part of the RJ group, which is the largest franchisee for Pizza Hut, KFC, Cream Bell and Costa Coffee in India.
6. The Company’s solid and well-entrenched distribution network covers urban, semi-urban, and rural markets, addressing demands of a wide range of consumers. The Company has 32 state-of-the-art manufacturing facilities in India, 6 internationally. It has a robust supply chain with 90+ owned depots, 2,500+ owned vehicles, 1,500+ primary distributors, and currently installed 775,000+ visi-coolers.
7. The Company has established backward integration facilities for production of preforms, crowns, plastic closures, corrugated boxes, corrugated pads, plastic crates, and shrink-wrap films in certain facilities to ensure operational efficiencies and high quality standards. The company also owns 55% stake (35% indirectly & 20% directly) in Lunarmech Technologies Pvt. Ltd. which produces and sells PET bottles caps and crown caps.
8. The company uses around 66,000 MT PET resin as packaging material for its finished products annually. It has engaged with GEM Enviro Management Pvt Ltd for phased implementation of 100% recycling of used PET bottles through collection from end users by placing dustbins reverse vending machines, direct collection from Institutions, etc.
9. In 2019, VBL concluded the acquisition of franchise rights in South and West regions from PepsiCo for a national bottling, sales and distribution footprint in 7 States and 5 Union Territories of India. With these acquisitions, the Company has significantly reinforced its partnership with PepsiCo and now account for over 80% of their India’s beverage sales volumes from 51% earlier.
10. In 2019, Pepsi co extended the bottling appointment and trademark license agreement from Oct 2, 2022 to Apr 30, 2039.
11. Risks: -
a) The Company’s operations span 6 countries – 3 in the Indian Subcontinent (India, Sri Lanka, Nepal), which contributed 85% to total revenues. Currently Nepal and Sri Lanka are going through economic crisis.
b) The beverage industry remains susceptible to changes in government regulations regarding the content of soft drinks, and to increasing environmental concerns in India about ground water depletion and discharge of effluents by bottling plants. Further, evolving concerns related to disposal of plastic may impact the beverages industry.
2. Don't risk more than 1%-2% of your capital as stop loss
3. Position Size formula:- Stop Loss Amount/(Buy Price-Initial Stop Loss Price)
4. Sell on initial stop loss hit or daily RSI closing below 40
5. Some other ways to sell stocks can be
a. 25% or 50% up in three weeks or less
b. Weekly tailing tops with high volume
c. Exhaustion gaps
d. Heavy daily volume without further upside
e. Largest one day price drop
On 18th April 2022
VBL
gave a high volume breakout after a consolidation since November 2021. It will be a good buy if it comes down to the support zone of ₹1000 and ₹1040 with a stop at ₹990. It posted a very good set of numbers for the quarter ending on 31st March 2022. its quarterly sales increased by 26%, quarterly profit increased by 96%, TTM sales increased by 34% and TTM profit increased by 103%. Other fundamentals:
1. Debt to equity at 0.82 (less than 1 is good), Interest Coverage at 7.75 (greater than 3 is good), Current ratio at 1.72 (greater than 1.5 is good).
2. The company has delivered good profit growth of 72.11% CAGR over last 5 years.
3. The company has been maintaining a healthy dividend payout of 17.64%.
4. The management of VBL Recommended the Bonus Issue of Equity Shares in the proportion of 1 (One) Equity Share of Rs. 10/- each for every 2 (Two) Equity Shares of Rs. 10/- each held by the shareholders of the Company.
5. Varun beverages is a part of the RJ group, which is the largest franchisee for Pizza Hut, KFC, Cream Bell and Costa Coffee in India.
6. The Company’s solid and well-entrenched distribution network covers urban, semi-urban, and rural markets, addressing demands of a wide range of consumers. The Company has 32 state-of-the-art manufacturing facilities in India, 6 internationally. It has a robust supply chain with 90+ owned depots, 2,500+ owned vehicles, 1,500+ primary distributors, and currently installed 775,000+ visi-coolers.
7. The Company has established backward integration facilities for production of preforms, crowns, plastic closures, corrugated boxes, corrugated pads, plastic crates, and shrink-wrap films in certain facilities to ensure operational efficiencies and high quality standards. The company also owns 55% stake (35% indirectly & 20% directly) in Lunarmech Technologies Pvt. Ltd. which produces and sells PET bottles caps and crown caps.
8. The company uses around 66,000 MT PET resin as packaging material for its finished products annually. It has engaged with GEM Enviro Management Pvt Ltd for phased implementation of 100% recycling of used PET bottles through collection from end users by placing dustbins reverse vending machines, direct collection from Institutions, etc.
9. In 2019, VBL concluded the acquisition of franchise rights in South and West regions from PepsiCo for a national bottling, sales and distribution footprint in 7 States and 5 Union Territories of India. With these acquisitions, the Company has significantly reinforced its partnership with PepsiCo and now account for over 80% of their India’s beverage sales volumes from 51% earlier.
10. In 2019, Pepsi co extended the bottling appointment and trademark license agreement from Oct 2, 2022 to Apr 30, 2039.
11. Risks: -
a) The Company’s operations span 6 countries – 3 in the Indian Subcontinent (India, Sri Lanka, Nepal), which contributed 85% to total revenues. Currently Nepal and Sri Lanka are going through economic crisis.
b) The beverage industry remains susceptible to changes in government regulations regarding the content of soft drinks, and to increasing environmental concerns in India about ground water depletion and discharge of effluents by bottling plants. Further, evolving concerns related to disposal of plastic may impact the beverages industry.