Friday, February 12, 2016

Bisleri Soft Drink play - Orient Beverages

Much has happened in equity markets since I wrote on the 19th of Jan about a nano cap Orient Beverages ( which is a distributor of Bisleri (~36% bottled water market share in India). I had originally bought @24 Rs in 2014 and sold after it quadrupled in a few months.

Bisleri intends to enter soft drink market in 2016. Ramesh Chauhan had unwillingly sold some of the legendary Indian soft drink brands like Thumbs Up, Limca, Maaza, Citra etc. to Coca Cola in 1993.

It will be their second innings in soft drink market and energy drink.

Orient Beverages has officially announced that they will act as distributors and open plant for the same as per today's announcement.

"Orient Beverages Ltd has informed BSE that the Board of Directors of the Company at its meeting held on February 11, 2016, has discussed that M/s. Bisleri International Pvt. Ltd. has launched some new soft drink products namely (i) SPICY, (ii) FONZO, (iii) LIMONATA and (iv) PINACOLADA. The Company as Franchisee of M/s. Bisleri International Pvt. Ltd. is going to commence commercial production of all said soft drinks shortly in its new plant at Sankrail, Howrah (West Bengal)."

Although one cannot bet too much on nano caps from portfolio weight perspective. In my opinion company could grow top line by 20-30% over next few years. Looks reasonable on MCAP / Sales basis for an FMCG play.

Nice background story:

By September 1993, Ramesh Chauhan realized that there was no point fighting with the giant which was on a poaching spree and decided to “surrender”. It was a very tough decision to make because these brands (Thums Up, Limca, Gold Spot) were carefully nurtured by Chauhan like his own children and now he had to sell them off!! With a heavy heart, he bid goodbye to his brands and sold them to Coca Cola. During the signing of the contract, Ramesh Chauhan turned emotional & cried incessantly.



  1. Hi Amit,

    Bisleri has been name to reckon in the minerals water market for years now. Today they easily command a premium of 10-20% over local mineral water players(which have mushroomed in past years). Yet in all these years orient beverage has hardly posted any good numbers worthy of calling it a FMCG or quasi FMCG player.

    No doubt, Ramesh Chauhan is a brand creator par excellence. But what's the use if the benefits of a strong brand are not reflecting in the numbers of a company like Orient for decades.

    Do you really believe the poddar's are ethical promoters interested in sharing the spoils from the company with retail shareholders ?

  2. Amit,

    Have you looked at Kothari Products or Nahar Capital both with good capital reserve but somehow market doesn't like them much. Although close to 75% holding from promoter in both cases


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