25x in returns, ₹25 lakh for every ₹1 lakh: Can Varun Beverages do it again?

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Subscribe to enjoy similar stories. Have you ever heard the classic investing story, “Had you held on to this IPO stock, you'd have made 25% CAGR today?" It’s one we’ve all come across. But then, life happens, we sell somewhere in between, and miss out on the big gains.

Sounds familiar, isn’t it? For me, that stock is Varun Beverages. Varun Beverages went public in 2016 with a market capitalization of around ₹8,000 crore. Back then, its sales stood at about ₹4,000 crore, with net margins of just 5%.

I got in early and held the stock for a couple of years. The investment doubled during that time—a solid 100% return on a modest amount. Naturally, I thought, "This is great, time to book profits!" and exited my position.

Then came the covid-19 pandemic. The stock dropped 30%—a confirmation bias moment for me. “Glad I sold it," I thought.

I assumed the story was over. But boy, was I wrong. From that low, the stock rebounded, and since then, it hasn’t looked back.

Today, it’s up almost 12x from where it was. From its initial public offering (IPO) in 2016 to now, Varun Beverages has delivered a jaw-dropping 25x return, which translates to a 50% compound annual growth rate (CAGR) over eight years. Truly incredible.

Yet, here I am, still wondering: Is it too late to re-enter? Have I missed the bus for good? Or is there more juice left in this rally? That’s exactly what we’re going to analyze in this article. Let’s dive in. At first glance, India’s non-alcoholic beverage market—valued at around $15 billion—might seem impressive.