Case 080Global macro tradesCore

Tanvik Beverages wants to enter a new state with 5 crore people, where per-capita soft drink spending is Rs 600 a year. It targets a 6% share in three years at a 20% EBITDA margin, with Rs 150 crore of set-up cost. Size the market, the revenue and the payback.

Bridgewater AssociatesStamford · 2026

The situation

Tanvik Beverages sells carbonated drinks and juices in three states and wants to enter a fourth, with a population of 5 crore. Household surveys put soft drink spending at about Rs 600 a person a year. Tanvik's plan targets a 6% share of the state's spending by year three, building 2%, 4% and then 6%, at a 20% EBITDA margin.

Entry needs Rs 150 crore up front for a bottling line, depots, coolers for retailers and launch marketing. Assume the market does not grow, ignore tax and working capital, and treat the margin as 20% from the first year.

Your task

How big is the market, what revenue and EBITDA does Tanvik reach, how long is the payback, and what does the case turn on?

Quick check

At the full 6% share, roughly how long does Tanvik take to earn back its Rs 150 crore?

Worked solution

Try it on paper, then open one step at a time.

30-second answerThe answer to give first

The market is about Rs 3,000 crore, Tanvik's revenue at 6% about Rs 180 crore and its EBITDA about Rs 36 crore, so payback takes about four years at full share. With share building 2%, 4% and 6%, cumulative EBITDA only passes Rs 150 crore after about 5.2 years. The case turns on how fast the share arrives: at 4% the payback stretches to over six years.

Step 1How do you size the market in one line, and check it?

Start top down: people times spending per head. 5 crore people at Rs 600 a year is Rs 3,000 crore. Then check it from the other end, because a top-down number that no one has tested is a guess with a decimal point. If the state has about 2.5 lakh shops selling soft drinks and each sells around Rs 1.2 lakh a year, the bottom-up figure is also Rs 3,000 crore. It is like estimating a college canteen's samosa sales from the number of students, then checking it against the number of trays the kitchen fries.

From people to profit: each step is one assumption5 crore peoplex Rs 600 a headper yearRs 3,000 crMarketall soft drinks in the stateRs 180 crTanvik revenue6% shareRs 36 crTanvik EBITDA20% marginRs 150 crSet-up costpaid once, up frontMarket bar is broken:the three bars to its rightshare one scale150 / 36 = 4.2 years at full share
5 crore people spending Rs 600 a year make a Rs 3,000 crore market; a 6% share is Rs 180 crore of revenue and Rs 36 crore of EBITDA at a 20% margin, against Rs 150 crore of set-up cost.
Step 2How long until the Rs 150 crore comes back?

At full share, Rs 150 crore over Rs 36 crore a year is 4.2 years. But the plan builds share over three years, and cumulative EBITDA of Rs 12, 36 and 72 crore in the first three years pushes payback out to about 5.2 years. The ramp costs a full year, because the early years earn a third and then two thirds of the steady state.

YearShareRevenue, Rs croreEBITDA, Rs croreCumulative EBITDA
12%601212
24%1202436
36%1803672
46%18036108
56%18036144
66%18036180
With share building from 2% to 6%, Tanvik's cumulative EBITDA is Rs 72 crore after three years and Rs 144 crore after five, passing the Rs 150 crore set-up cost at about 5.2 years.
Cumulative EBITDA against the Rs 150 crore set-up: the ramp costs a yearSet-up cost Rs 150 crore4.2 yrs if share is instant5.2 yrs with 2%, 4%, 6% ramp0123456750100200250Years after entry (cumulative EBITDA, Rs crore, on the vertical axis)
If the 6% share arrived at once, cumulative EBITDA would pass Rs 150 crore at 4.2 years; building share over three years delays payback to about 5.2 years.
Step 3What does the case turn on, and what would you want to know?

The share assumption, because everything else is arithmetic. Each point of share is worth Rs 30 crore of revenue and Rs 6 crore of EBITDA, so a 4% share instead of 6% gives Rs 24 crore a year and a payback of 6.25 years even with no ramp. Ask where the share comes from: incumbents defend shelves, and share bought with discounts shrinks the 20% margin at the same time. Ask whether the market grows; spending per head tends to rise with incomes, which would help. And ask about weather, since a cool summer can wipe out a year's volume.

A macro fund asks this kind of case to see whether you can build a chain of assumptions and then find the one that carries the answer. Close with a view: the entry pays back in four to five years if share arrives on plan, the margin and share assumptions pull against each other, and the thing to test before committing is what share similar entrants have actually reached in their third year.

Where candidates lose it

The usual miss is stopping at the steady-state payback of about four years. The plan itself says share builds over three years, and using the ramp moves payback out by a year, which is the difference the interviewer is listening for.

The second is accepting 6% share and a 20% margin together without noticing the tension: winning share quickly usually means price cuts or heavy trade spend, which is margin given away.

What the interviewer asks next

  • What share does Tanvik need to pay back in three years at full share?
  • The market grows 8% a year. How does that change the payback?
  • Would you rather enter by acquiring a local brand for Rs 300 crore with 5% share? Set out how you would decide.

Asked at Bridgewater Associates, Macro, Stamford, 2026 (Wall Street Oasis): business oriented ones involving market expansion, revenue and profit analysis (think consulting style)

Company names and figures are illustrative.