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63	63	= Industry Overview =
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65		-As per the World Bank, the Indian economy is expected to grow at 8.3% in FY22 and at 8.7% in FY23(1). With this, India continued to be among the fastest-growing economies in 2021. The growth outlook reflects increased private sector and infrastructure investments, as well as rewards from the advancing reforms.{{footnote}}https://varunpepsi.com/wp-content/uploads/2022/03/VBL_Annual-Report_2021.pdf{{/footnote}}
	65	+As per the World Bank, the Indian economy is expected to grow at 8.3% in FY22 and at 8.7% in FY23. With this, India continued to be among the fastest-growing economies in 2021. The growth outlook reflects increased private sector and infrastructure investments, as well as rewards from the advancing reforms.{{footnote}}https://varunpepsi.com/wp-content/uploads/2022/03/VBL_Annual-Report_2021.pdf{{/footnote}}
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68		-Soft drinks market
	68	+== Soft drinks market ==
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70	70	At the start of 2021, the domestic soft drinks industry witnessed improved traction led by a healthy demand environment across markets, following the demand disruption caused by nation-wide lockdown in the peak summer season of 2020. However, the second wave of the pandemic in April and May of 2021 resulted in localized lockdowns and restrictions, which once again disrupted consumption trends in the key season of summer. This resulted in moderate soft drink volumes in the first half of the year. As lockdown restrictions relaxed gradually in the second half, the industry saw faster than anticipated recovery in demand and consumption, which assisted overall growth in 2021.
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72	72	In the last two years, due to the pandemic period, the industry underwent a significant shift in consumer purchase patterns. During the lockdown-related restrictions, while out-of-home consumption patterns were notably impacted, in-home consumption trend improved significantly. However, as the economy recovered from the second wave, out-of-home consumption bounced back in addition to a growth in the in-home consumption, leading to healthy overall growth. The beverage value chains are also being reshaped as consumer tastes and preferences evolve towards a greater emphasis on health and sustainability. The industry is continuously focused on introducing new product innovations in sync with these market trends.
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74	74	Going forward, the soft drinks industry in India is expected to report healthy growth across categories on the back of better demographics, improving retail penetration across markets, better agro-economics, and rising trend of in-home consumption. The main segments constituting the soft drinks market in India are carbonates, juices, and bottled water. In value terms, carbonates is the largest category.
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77		-Soft Drinks
	79	+== Soft Drinks ==
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79	79	Over the past few years, the Indian soft drink market has witnessed significant growth as consumption has been gradually improving in India.
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81	81	Favourable Demographic Profile: India is a young country with individuals in 15-64 years age group accounting for a majority of the overall population, providing the nation with a large workforce to support economic growth. Given the changing population demographics, higher spending capacity of young consumers, rapid urbanization, and growing rural consumption are expected to drive consumption of soft drinks in India.
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83		-Rapid Urbanization and Growing Income: With more than 50% of India’s population falling under the working age category, there has been a rise in disposable income, leading to a substantial change in spending patterns. In addition, the positive trend of women employees in India has resulted in higher family disposable income, culminating in higher consumer spending.
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	87	+Rapid Urbanization and Growing Income: With more than 50% of India's population falling under the working age category, there has been a rise in disposable income, leading to a substantial change in spending patterns. In addition, the positive trend of women employees in India has resulted in higher family disposable income, culminating in higher consumer spending.
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85	85	Increased Average Spend Per Household: There has been a strong growth in absolute number of average spend per household over the last decade. Indian consumers are increasingly improving the discretionary spends on categories other than essentials, such as food, beverages and consumer durables. Increased disposable income, consumer preferences and a growing population influence the demand for carbonated soft drinks.
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87		-Electrification: India’s rural sentiment is expected to maintain a healthy momentum with good monsoon and better agro-economics, which bodes well for the country’s overall economic revival. Increased electrification of Indian villages along with improving quality of electricity supply will help enhance penetration of cooling infrastructure in these regions, thereby supporting industry growth.
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	93	+Electrification: India's rural sentiment is expected to maintain a healthy momentum with good monsoon and better agro-economics, which bodes well for the country's overall economic revival. Increased electrification of Indian villages along with improving quality of electricity supply will help enhance penetration of cooling infrastructure in these regions, thereby supporting industry growth.
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89	89	Location: India has a hot tropical climate. Summer in most parts of India is extremely hot and dry. It starts in April and lasts until the beginning of October, with temperatures peaking in June. A large portion of the population lives in hot and dry climate, and as a result, soft drink consumption is likely to continue to rise in the foreseeable future.
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92		-Financial Highlights
	99	+[[image:VBL6.png]]
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	101	+= Financial Highlights =
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94	94	Revenue from operations for CY21 stood at Rs 88,232.3 million as against Rs 64,501.4 million in CY20. Total sales volumes stood at 569 million cases in CY21 as compared to 425 million cases in CY20. In the domestic market, sales volume stood at 454 million cases as compared to 337 million cases in CY20. Carbonated Soft Drinks constituted 70.3%, Juice 6.4% and Packaged Drinking water contributed 23.3% of total sales volumes in CY21.
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96	96	Realization per case stood at Rs 155.0 in CY21 driven by an improvement in realizations in its international operations.
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98	98	For CY21, EBITDA increased by 37.7% to Rs 16,546.5 million. Gross margins stood at 54.3%, while EBITDA margins expanded by 12 bps to 18.8% in CY21.
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100	100	In addition to the cost efficiency measures, VBL reduced its finance cost by 34.3% primarily because of lower average cost of borrowing, which helped in improving the net profit margin. In CY21, PAT stood at Rs 7,460.5 million as compared to Rs 3,572.7 million in CY20.
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102	102	On the balance sheet front, Net Debt stood at Rs 30,052.7 million as on December 31, 2021, as against Rs 30,158.5 million as on December 31, 2020. Debt to Equity ratio stood at 0.72 as on December 31, 2021. Working capital days increased to ~~ 35 days as on December 31, 2021, primarily because of higher stocking of Pet Chips/Preforms for the next season in order to mitigate the logistics and pricing risks.
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104		-Bonus Issue
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	118	+**Bonus Issue**
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106	106	During the year under review, the company has issued and allotted 144,344,360 Bonus Equity Shares in the proportion of 1:2 (i.e. one equity share for every two equity shares) to the eligible Members whose names appeared in the Register of Members / list of beneficial owners as on the record date fixed for this purpose.
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108		-References
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	123	+= References =
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