Indian Accounting Research Analyst, Trudence Capital Advisors

Nitin Mangal

Indian Accounting Research Analyst

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Forensic Accounting

<ul>
<li>
<a href="https://www.smartkarma.com/entities/varun-beverages-ltd" target="_blank" data-smartkarma-citation="entities:23653:1" rel="noopener">Varun Beverages Ltd (VBL IN)</a> is engaged in manufacturing, selling, bottling and distribution of beverages of Pepsi brand.</li>
<li>It operates mostly in India but also looks after, Sri Lanka, Nepal, Zambia, Morocco and Zimbabwe, as per franchisee agreement with PepsiCo India.</li>
<li>Key forensic concerns include unusual accounting with respect to containers, trend in discounting, advances to a related entity, etc and some governance alarms. </li>
</ul>



Varun Beverages Ltd (VBL IN) is engaged in manufacturing, selling, bottling and distribution of beverages of Pepsi brand.
It operates mostly in India but also looks after, Sri Lanka, Nepal, Zambia, Morocco and Zimbabwe, as per franchisee agreement with PepsiCo India.
Key forensic concerns include unusual accounting with respect to containers, trend in discounting, advances to a related entity, etc and some governance alarms. 


External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<div><div><div><div><ul><li>VBL is the second largest franchisee of PepsiCo in the world (outside the USA).</li><li>Products manufactured by VBL include Carbonated Soft Drinks - Pepsi, Mountain Dew, Seven Up, Mirinda; Non-Carbonated Beverages - Tropicana Slice, Tropicana Frutz; and Bottled water – Aquafina.</li><li>The company accounts for ~90% of PepsiCo’s beverage sales volume in India and present in 27 States and 7 UT. It is also the exclusive bottler for PepsiCo in Nepal, Sri Lanka, Morocco, Zambia, and Zimbabwe.</li></ul></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

VBL is the second largest franchisee of PepsiCo in the world (outside the USA).Products manufactured by VBL include Carbonated Soft Drinks - Pepsi, Mountain Dew, Seven Up, Mirinda; Non-Carbonated Beverages - Tropicana Slice, Tropicana Frutz; and Bottled water – Aquafina.The company accounts for ~90% of PepsiCo’s beverage sales volume in India and present in 27 States and 7 UT. It is also the exclusive bottler for PepsiCo in Nepal, Sri Lanka, Morocco, Zambia, and Zimbabwe.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Varun Beverages Ltd - Soaring Temperature to Aid Volume Growth

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>The March 2023 Rebalance results for the NIFTY broad market Indices were announced after the close on Friday 17th February 2023.</li>
<li>In my previous insights, I highlighted <a href="https://www.smartkarma.com/entities/pidilite-industries-ltd" target="_blank" data-smartkarma-citation="entities:20573:1" rel="noopener">Pidilite Industries (PIDI IN)</a> as a <em>potential</em> ADD for NIFTY 50 but it will not be added in March 2023. There are no changes.</li>
<li>However, for NIFTY 100 (&amp; NIFTY Next 50), 4/5 Expected ADDs and 5/5 Expected DELs were predicted correctly.</li>
</ul>


The March 2023 Rebalance results for the NIFTY broad market Indices were announced after the close on Friday 17th February 2023.
In my previous insights, I highlighted Pidilite Industries (PIDI IN) as a potential ADD for NIFTY 50 but it will not be added in March 2023. There are no changes.
However, for NIFTY 100 (&amp; NIFTY Next 50), 4/5 Expected ADDs and 5/5 Expected DELs were predicted correctly.


NIFTY Mar 23 Rebal: Quiddity Flow Expectations

<ul><li>VBL delivered robust all-round performance, led by strong volume, and realization growth across regions and markets as the company continued its distribution expansion, strong traction from newly acquired territories (south and west) and scaling up of Sting energy drink.</li><li>Despite raw material inflation, gross margins improved on account of early stocking of key raw materials, selective price hikes, rationalization of discounts, and improved realization led by higher salience of the high-margin Sting portfolio.</li><li>EBITDA margins improved on strong operating leverage benefits.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

VBL delivered robust all-round performance, led by strong volume, and realization growth across regions and markets as the company continued its distribution expansion, strong traction from newly acquired territories (south and west) and scaling up of Sting energy drink.Despite raw material inflation, gross margins improved on account of early stocking of key raw materials, selective price hikes, rationalization of discounts, and improved realization led by higher salience of the high-margin Sting portfolio.EBITDA margins improved on strong operating leverage benefits.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Varun Beverages Ltd - Robust Performance; Maintain BUY

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>End December was the end of the review cutoff for a lot of indices that will rebalance within the next couple of months.</li>
<li>
<a href="https://www.smartkarma.com/entities/pexa-group-ltd" target="_blank" data-smartkarma-citation="entities:34716:1" rel="noopener">PEXA Group (PXA AU)</a> replaces <a href="https://www.smartkarma.com/entities/pendal-group-ltd" target="_blank" data-smartkarma-citation="entities:15795:1" rel="noopener">Pendal Group (PDL AU)</a> in the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> at the close on 12 January.</li>
<li>There were big outflows from Hong Kong and China focused ETFs led by <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index-etf" target="_blank" data-smartkarma-citation="entities:25:1" rel="noopener">Hang Seng H Share Index ETF (2828 HK)</a> and <a href="https://www.smartkarma.com/entities/tracker-fund-of-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:29257:1" rel="noopener">Tracker Fund of Hong Kong Ltd (2800 HK)</a>.</li>
</ul>


End December was the end of the review cutoff for a lot of indices that will rebalance within the next couple of months.

PEXA Group (PXA AU) replaces Pendal Group (PDL AU) in the S&amp;P/ASX 200 (AS51 INDEX) at the close on 12 January.
There were big outflows from Hong Kong and China focused ETFs led by Hang Seng H Share Index ETF (2828 HK) and Tracker Fund of Hong Kong Ltd (2800 HK).


Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, HSI, HSCI, KS200, KQ150, CSI300, SENSEX, LQ45, PSEi

India

Varun Beverages Limited produces and distributes beverages. The Company offers carbonated soft drinks and non-alcoholic beverages, as well as provides packaged drinking water. Varun Beverages serves customers worldwide.

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Varun Beverages (VBL IN)

Varun Beverages Ltd- Forensic Analysis

Key forensic concerns include unusual accounting with respect to containers, trend in discounting, advances to a related entity, etc and some...

Nitin Mangal

Varun Beverages Ltd - Soaring Temperature to Aid Volume Growth

VBL is the second largest franchisee of PepsiCo in the world (outside the USA). Products manufactured by VBL include Carbonated Soft Drinks -...

Axis Direct

NIFTY Mar 23 Rebal: Quiddity Flow Expectations

Most of the index changes were flagged very early in the reference period and have been in Quiddity's radar since October 2022.

Janaghan Jeyakumar, CFA

Varun Beverages Ltd - Robust Performance; Maintain BUY

VBL delivered robust all-round performance, led by strong volume, and realization growth across regions and markets as the company continued its...

Axis Direct

Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, HSI, HSCI, KS200, KQ150, CSI300, SENSEX, LQ45, PSEi

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

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