Coca-Cola India’s largest independent bottler, SLMG Beverages, is not considering an initial public offering in the near term and will instead focus on consolidation, manufacturing expansion and strengthening distribution networks as it targets Rs 20,000 crore in revenue over the next six to seven years, its Joint Managing Director Paritosh Ladhani said.
In an interview with BW Businessworld, Ladhani noted that the company, which recently crossed Rs 8,000 crore in revenue, is targeting the Rs 10,000 crore mark in the next one to two years, depending on business tailwinds. To support this growth, SLMG plans to invest Rs 4,000 to Rs 5,000 crore over the next three years, with new plants lined up across western, central and eastern Uttar Pradesh after commissioning its Rs 1,500-crore bottling facility in Bihar.
Betting Big On Capacity Expansion
The company is doubling down on manufacturing and distribution expansion in its core markets of Uttar Pradesh and Bihar, betting on rising consumption and deeper market penetration to fuel the next phase of growth.
“We have just done Rs 1,500 crore of that promised investment of Rs 8,000 crore in Bihar,” Ladhani said, adding that the company remains “very bullish about the growth of this country” despite global headwinds. He noted that SLMG is evaluating new investments in Uttar Pradesh and eastern Bihar, with fresh facilities planned across western, central and eastern Uttar Pradesh.
The joint MD pointed out that the attractiveness of Uttar Pradesh and Bihar lies in both population scale and strong market leadership, with SLMG commanding over 60 per cent market share in both regions. “We have got a very good brand pool, whether it is Thums Up, Maaza or Sprite. Our brand pool is very, very strong in these areas,” he stated, adding that a network of over 1,500 distributors and “relentless execution” continue to support growth.
On future investments, he emphasised that the company plans to invest another Rs 4,000 to Rs 5,000 crore over the next three years, with additional investments beyond that, and that annual capex is expected to remain in the Rs 1,500 to Rs 2,000 crore range.
IPO In Medium Term, Growth In Focus
While the company continues to evaluate an IPO, he added that the listing plans have been pushed to the medium term as the immediate priority remains scaling operations and consolidating its footprint. Ladhani said the next few years will focus on strengthening manufacturing, distribution, and product readiness before revisiting public market ambitions.
“I think it is a very strategic decision to go for IPO. Right now, we are on track for it, but not in the short term, but medium term, definitely we are looking at it,” Ladhani mentioned. He added that there is no fixed timeline yet, with the company instead prioritising consolidation over the next two to four years.
“We are going to set up plants in all parts of UP. We are going to consolidate our distribution, we are going to consolidate our production capacities,” he highlighted, adding that SLMG has “so much product lined up” and requires greater capacities to support growth across premium, affordable and mid-range offerings.
At the same time, SLMG is chasing a larger-scale ambition globally and domestically. Ladhani explained that the company, currently the world’s 15th-largest Coca-Cola bottler and India’s second-largest bottler, has climbed sharply from the top 30 over the last four years, supported by a CAGR of over 21 per cent. “That is one of the highest growth of any bottler across the world,” he said, adding that the company hopes its “top ten journey will be much, much faster.”
On the revenue front, SLMG sees Rs 10,000 crore as the next near-term milestone, with a larger Rs 20,000-crore ambition over the next six to seven years. “Rs 10,000 crore is our first target,” Ladhani mentioned, adding that while the timeline will depend on business tailwinds, “we will definitely reach it.”
He noted that continued double-digit growth and capacity additions will remain critical as beverage demand rises, including in newer segments such as zero sugar and premium products. “If we grow at the rate which we have been growing in the last four years, we will require the capacities which I am talking about,” he added.
Quick Commerce Gains Pace
While general trade continues to dominate beverage sales, he said, newer consumption channels such as quick commerce and modern trade are steadily reshaping demand patterns. Ladhani noted that modern trade has contributed high single digits to the business for the last seven to eight years, while quick commerce, though still small, is witnessing rapid growth post-Covid.
“It is a very minuscule figure in quick commerce, but it is growing at a very, very rapid rate,” he said, adding that SLMG’s strategy is to remain present “everywhere where the consumers go,” spanning general trade, modern retail, cinemas, railways, airports and digital channels. “We are very, very bullish that this is going to be a very significant vertical for all of us, including UP and Bihar,” he adds.
However, Ladhani added that the company is not singularly focused on pushing modern trade contribution into double digits, arguing that general trade remains equally important due to the sheer scale of growth opportunity. While he estimates modern trade contribution could move to double digits over the next five to six years, he notes that quick commerce will increasingly need to be evaluated alongside modern retail.
“There is a growth opportunity in both modern trade and general trade almost together,” he explained, adding, “the more I grow in general trade, the more diverse your distribution is.”
Summer Demand Stays Strong
Despite increasingly erratic weather patterns and regional disruptions, SLMG says demand momentum has remained healthy so far this summer, supported by strong category traction and rising consumption. Ladhani said that the company has started the season on a positive note despite some disruptions. “We got a good quarter one. There have been a few disturbances, but we are growing at a very healthy growth so far and we are looking forward for a great summer,” he says.
On category trends, Ladhani noted that growth continues to be broad-based across sparkling beverages and juices, aided by India’s still-low beverage penetration. “Last year also we grew in sparkling very well. Juices also grew at a very healthy rate and this year also we are seeing same traction,” he says, adding that with India’s per capita beverage consumption at around 28 to 30, there remains “headroom for growth for every category.” While multiple verticals are expected to grow, he notes that “the crux of the growth will come from sparkling.”
Managing Global Headwinds
He added that global supply chain disruptions and rising packaging costs linked to West Asia tensions have had some impact on the business, though the company has so far managed the pressures without resorting to price hikes. Ladhani noted that the current volatility is not entirely unfamiliar, pointing to similar disruptions during Covid and earlier periods of geopolitical uncertainty.
“Yeah, it has but we have been growing and we have been managing it well,” he said, adding, “This happened even in Covid time, it happened even in times when there is some global pressures. This is not something new.” On pricing adjustments, he says the company is taking a wait-and-watch approach. “I do not think so. We have thought about it. Let us just move on and see how the summer unfolds and then we will take a call,” he added.
On the recent shortages of Diet Coke in some metro markets, Ladhani, while not commenting much, said that the situation has seen “significant improvement,” though visibility remains limited given supply dependencies on geographies affected by the Middle East crisis.
At the same time, SLMG is stepping up investments in sustainability and operational efficiency, with 58 per cent of its production electricity already sourced from solar and a target to increase that to 65 to 70 per cent. The company says it has been harvesting more than 100 per cent of the water it consumes for 17 years and is currently at 257 per cent water harvesting, while 35 per cent of its fleet and distributor network has already transitioned to electric vehicles. “We are using a lot of artificial intelligence technology in ensuring that our plants are safe,” says Ladhani, adding that “your backend has to be very strong” to build a sustainable business.
Consolidation Phase
After years of expansion through territory additions and acquisitions, he noted that the company’s immediate focus is firmly on consolidation rather than inorganic growth opportunities. Ladhani noted that the company already serves a massive consumer base, covering nearly 370 million people, leaving significant headroom for deeper market penetration within existing territories. “Right now, we are just consolidating because we are currently taking care of about 370 million, 37 crore to be exact,” he stated, adding, “already it is such a big territory to execute our products. So, there is so much to do in this territory.”
On evolving consumer behaviour, Ladhani explained that India’s beverage market continues to see demand across both premium and affordable products, with value pricing still playing a critical role in driving volumes. “Value pricing is important because it gives you volume also. Affordable pricing is very important because it gives you volume also,” he noted, noting that lower-priced packs continue to witness multiple transactions, especially during peak summer demand. At the same time, he says premiumisation is gaining traction, provided consumers see clear value.
“The consumer will only give a premium for a product if he finds that the Rs 100 or Rs 200 he is giving for that can is worth it,” he highlighted, pointing to launches such as Rimzim Jeera, Rooh Afza Drink and Sprite Mint as examples of the company’s ongoing innovation across price points. |
