According to CLSA, Varun Beverage’s partnership with Japan-based Asahi Group Holdings for the Calpis brand is strategically positive as it adds a differentiated fermented dairy-based ready-to-drink (RTD) offering, which is akin to a premium lassi sub-segment, to Varun Beverages’ existing portfolio.
A day prior, Varun Beverages said it has partnered with Asahi Group to manufacture, distribute and sell the latter’s Calpis brand — a fermented milk-based beverage with over a century of presence in Japan.Asahi will be responsible for product development and technical support and its Indian subsidiary will handle the marketing and brand management.
CLSA said the partnership underscore’s Varun Beverages’ ability to leverage its strong manufacturing base and extensive distribution network, including its existing cold-chain infrastructure.On another note, Varun Beverages reported a positive set of earnings in the March quarter.
Its net profit increased 20% to 872crore from ₹726.4 crore last year. Its revenue increased 18.3% to ₹6,721 crore from ₹5,680 crore in the March quarter of the previous fiscal.
The company’s earnings before interest, tax, depreciation and amortization (EBITDA) increased 21% to ₹1,528.7 crore from ₹1,264 crore last year. Its margins expanded to 22.8% from 21.6% in the year-ago period.
Of the 28 analysts who have coverage on the Varun Beverages stock, 24 have a “buy” rating and four have a “hold” rating.
Shares of Varun Beverages were trading 0.4% up at ₹533.7 up at 10.15 am on Friday. The stock has gained 3.8% in the past month and 8.7% this year, so far.
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