Detailed Rationale

Crisil Ratings has reaffirmed its ‘Crisil AA/Stable’ rating on the non convertible debentures of Jubilant Beverages Limited (JBL).

 

The rating continues to reflect the strong business risk profile of Hindustan Coca‑Cola Beverages Pvt Ltd (HCCB), the wholly owned subsidiary of Hindustan Coca‑Cola Holdings Pvt Ltd (HCCH), in which JBL has acquired 40% stake by purchasing from HCCH’s shareholder entities, which are part of The Coca Cola Company group (TCCC; rated ‘A+/Stable’ by S&P Global Ratings). HCCB is the largest Indian Coca‑Cola bottler having distribution rights in some states in West and South India. The rating also factors in a healthy cover for the acquisition debt from the Jubilant Bhartia group’s investment holding in its listed entities as well as the value of the 40% stake in HCCH.

 

Acquisition of the 40% stake in HCCH, through JBL, was completed on July 22, 2025. HCCB is engaged in the preparation, packaging, distribution and sale of non-alcoholic ready-to-drink (NARTD) beverages. The target company has a well-diversified product portfolio of 37 beverage products and strong presence in the NARTD beverages market. Notably, majority of the top beverages in India are TCCC’s products, with strong position across the sparkling and juice segments. The acquisition involved an outgo of Rs 11,724 crore, which was funded through a mix of debt (Rs 2,650 crore in JBL and Rs 3,000 crore by JBL’s parent-Jubilant Bevco Ltd [JBCL]), compulsorily convertible preference shares (CCPS) of Rs 4,628 crore from Goldman Sachs group entities and rest as optionally convertible redeemable preference shares (OCRPS) from the promoters through JBCL.

 

Crisil Ratings has used the holding company approach to assess the credit risk profile of JBL, which has raised debt on the strength of its shareholding in HCCH as well as the Jubilant Bhartia group’s shareholding in Jubilant Foodworks Limited (JFL; ‘Crisil A1+’), Jubilant Pharmova Limited (JPL), Jubilant Ingrevia Limited (JVL; ‘Crisil A1+’) and Jubilant Agri & Consumer Products Limited (JACPL). These entities continue to maintain healthy credit risk profiles, supported by their established business positions, good operating capabilities as well as financial risk metrics.

 

The overall net debt cover stands at ~6.5 times as on April 28, 2026, including the incremental debt raised by JBCL. While this represents a moderation from 8.0 times in February 2025, the deterioration is primarily attributed to subdued external equity market conditions and a compression in the market capitalisation of JFL. Despite the softening, the current cover remains healthy under current market conditions.

 

The group has the flexibility to retire the acquisition debt through multiple avenues, including through stake sale in HCCH and other listed entities or by way of refinancing. No dividend is expected to flow into JBL from HCCH. As there are no coupon-linked payments for the NCDs (zero coupon bonds), funding requirements are expected to remain negligible.

 

These strengths are partially offset by exposure to market risks. Any impact on the financial flexibility of the holding companies of the Jubilant Bhartia group owing to sizeable debt-funded acquisition or investment or support to group entities will be monitorable.

Analytical Approach

Crisil Ratings has followed the holding company approach to assess the credit risk profile of JBL. The company has raised debt on the strength of the shareholding in HCCH and the shareholding of the promoters of the Jubilant Bhartia group in listed operating companies.

 

The CCPS have been treated as equity as there are no annual contracted payouts during the tenure of the instrument, which is nine years (longer than the repayment timelines for the acquisition debt); these shares are expected to be redeemed or converted once the acquisition debt is retired.

Key Rating Drivers - Strengths

Established market position of HCCB in the NARTD market

HCCB has a well-diversified product portfolio and strong presence in the NARTD beverages market. The company is engaged in the preparation, packaging, distribution and sale of NARTD beverages, with distribution rights in certain geographies of West and South India. It has a robust portfolio of 37 beverage products and enjoys leadership across categories. Notably, majority of the top beverages in India are TCCC’s products, with the company enjoying strong position across the sparkling and juice segments. HCCB has a strong foothold in south and west India. For fiscal 2025, HCCB registered revenue of Rs 12,751 crore (Rs 14,022 crore in fiscal 2024) and earnings before interest, tax, depreciation and amortisation (Ebitda) margin of ~12.9% (12.7% in fiscal 2024) which was lower on-year due to loss of revenue from divested territories. While fiscal 2026 is estimated to have been impacted by unseasonal weather patterns, including heavy rains and extended monsoon, significantly impacted beverage sales by dampening summer peak demand, revenue is expected to grow in double-digits over the medium term supported by healthy demand, with improvement in operating margin through better operational efficiency and cost-saving measures. HCCB had low debt as on March 31, 2025, enjoying superior capital structure and debt protection metrics, besides liquid surplus of Rs 49 crore.

 

HCCB, as a part of the domestic beverage industry, remains susceptible to regulatory changes related to content in soft drinks and environmental issues, such as ground water depletion and discharge of effluents by bottling plants in India. Furthermore, concerns over disposal of plastic bottles and use of single-use plastic straws in ready-to-drink beverages may continue to impact the industry.

 

Strong financial flexibility driven by investments in listed companies of the Jubilant Bhartia group

JBL has strong financial flexibility aided by the market value of the investments of the Jubilant Bhartia group’s promoters in JFL (40.27% shareholding), JPL (47.68% shareholding), JVL (45.22% shareholding) and JACPL (74.36% shareholding) as on March 31, 2026. The market value of the promoters’ shareholding in these companies was around Rs 26,000 crore as on April 28, 2026 (net of shares pledged and existing promoter company debt). This, along with the equity investment in HCCH factored at cost, results in comfortable debt cover of ~6.5 times for the entire acquisition debt. That said, sales of HCCH’s shares will be prioritised for servicing JBL’s debt.

 

For the food service and other businesses in JBL and JBCL, debt requirement is expected to be limited. Overall, the group is not expected to avail significant debt in the holding companies till the retirement of the acquisition debt.

 

Stable and diversified operations of key entities of the Jubilant Bhartia group

The Jubilant Bhartia group benefits from the robust and diversified credit risk profiles of its operating entities, in which the value of the investments is substantial. It has diversified presence across industries, such as pharmaceuticals, life sciences, quick-service restaurants (QSRs) and chemicals, with the listed entities performing well and having proven ability to manage business cycles, especially in the life sciences industry, focusing on niche, high entry-barrier markets with cost-competitive products.

 

Performance of listed entities was healthy. In fiscal 2025, JFL achieved consolidated revenue of Rs 8,152 crore and Ebitda margin of 13.0% (post leases); JPL registered revenue of Rs 7,235 crore and Ebitda margin of 16.3%; JVL achieved revenue of Rs 4,178 crore and Ebitda margin of 12.4% and JACPL registered revenue of Rs 1,562 crore and Ebitda margin of 9.5%. (Crisil adjusted)

Key Rating Drivers - Weaknesses

Exposure to market risks

The financial flexibility of the Jubilant Bhartia group will, to some extent, depend on prevailing market sentiments and share prices of key operating companies. While the businesses of JFL, JPL, JVL and JACPL are stable and have been witnessing healthy growth, with no other cash flow expected in the form of dividend, any fluctuations in the market value of the investments caused by macroeconomic conditions or operating performance of the companies impacting the debt cover on the NCDs raised by JBL, will be a key rating sensitivity factor.

Liquidity Strong

Financial flexibility will remain strong, supported by the sizeable market value of the group’s investments in listed entities of the group, along with the acquired interest in HCCH. Since there are no coupon-linked payments to the NCDs, incremental capital or working requirements are expected to remain negligible.

Outlook Stable

JBL is expected to maintain comfortable debt cover over the medium term, supported by the healthy operating performance of the key operating entities of the group.

Rating sensitivity factors

Upward factors:

• Improvement in credit risk profile of key operating companies of the Jubilant Bhartia group by one or more notches
• Sustained and substantial improvement in the net debt cover driven by significant increase in the market value of investments or reduction in debt levels.

 

Downward factors:

• Significant weakening of the credit risk profiles of the operating entities by more than one notch
• Increase in debt at the promoter level or fall in the market value of investments weakening the net debt cover materially on a sustained basis.

About the Company

JBL was incorporated in October 2024 as an operating company to undertake businesses of food services and distribution, trading, among others. JBL has acquired a 40% stake in HCCH. JBL also started a food services and distribution business in February 2025 and will focus on providing customised food solutions to the food service industry, including hotels, restaurants, caterers and chain restaurants. The scale of the business is expected to be Rs 20 crore over the medium term and, hence, working capital requirement will be miniscule.

About the Group

The Jubilant Bhartia group, promoted by Shyam Bhartia and Hari Bhartia, is headquartered in New Delhi. It employs a global workforce of over 40,000 employees and has presence in diverse industries through JPL (pharmaceuticals, contract research and proprietary novel drugs), JVL (life sciences ingredients), JFL (QSR; master franchisees for Domino's Pizza and Popeyes in India) and JACPL (agriculture and performance polymers; specialty chemicals for industrial applications), which are the key flagship listed entities of the group, with a combined market cap of around Rs 60,000 crore.

 

It also has smaller presence in other industries through Jubilant Motorworks Private Limited (dealerships for luxury cars such as Audi, Mahindra and MG Motors), Jubilant Enpro Private Limited (consulting services for aerospace and oilfield industries) and Jubilant Consumer Private Limited (food products).

Key financial indicators

As on / for the period ended March 31	Unit	2025	2024
Revenue	Rs crore	1.44	NA
Profit after tax (PAT)	Rs crore	(0.50)	NA
PAT margin	%	(34.69)	NA
Adjusted debt / adjusted networth	%	13.61	NA
Adjusted interest coverage	Times	(1.63)	NA

  NA: not applicable; as the company was incorporated in fiscal 2025.

Any other information: Not Applicable