Varun Beverages turning ex-dividend tomorrow: What can be your stock prediction strategy?
3 min read . Updated: 11 Apr 2023, 07:46 PM IST
Premium- With a market valuation of ₹93,422 Cr, Varun Beverages is a large cap company with operations in the FMCG industry.
With a market valuation of ₹93,422 Cr, Varun Beverages is a large cap company with operations in the FMCG industry. A significant participant in the beverage industry and the second-largest franchisee of carbonated soft drinks (CSDs) and non-carbonated drinks marketed under PepsiCo brands. The stock is turning ex-dividend tomorrow with for receipt of final dividend of Re. 1/- per equity share of face value of Rs. 10/- each for the financial year ended December 31, 2022.
"The Board of Directors fixed Wednesday, April 12, 2023 as the Record Date, for the purpose of ascertaining the eligibility of Equity Shareholders entitled for receipt of Final Dividend of Re. 1/- per Equity Share of face value of Rs. 10/- each for the Financial Year ended December 31, 2022 as approved by the Equity Shareholders of the Company at their Annual General Meeting held on March 27, 2023. The Final Dividend will be paid on and from Thursday, April 13, 2023 to those shareholders whose name appears in the Register of Members of the Company or in the list of beneficial owners maintained by the Depositories as on Wednesday, April 12, 2023," said the Board of Directors of Varun Beverages in a stock exchange filing.
Varun Beverages has announced a 35.00%a equity dividend with a face value of ₹10 which equates to ₹3.5 per share for the fiscal year that ended in December 2022. This generates a dividend yield at the current share price of ₹1,434.90 of 0.24%. The company has a solid track record of dividend declarations during the past five years. Varun Beverages Ltd. has issued 7 dividends since August 16, 2017, according to Trendlyne statistics. Varun Beverages Ltd. announced an equity dividend worth ₹2.50 per share over the past 12 months. This generates a dividend yield at the current share price of ₹1438.25 of 0.17%.
The shares of Varun Beverages closed today on the NSE at ₹1,434.90 apiece level, up by 1.50% from the previous close of ₹1,413.70. In the last 1 year the stock has generated a multibagger return of 118.76% and on a YTD basis, it has gained 7.64% so far in 2023. The stock touched a 52-week-high of ₹1,474.00 on (05-Apr-2023) and a 52-week-low of ₹630.07 on (12-Apr-2022).
Commenting on the technical stock outlook, Rahul Ghose, Founder & CEO – Hedged, an algorithm-powered advisory platform said “The Varun Beverages stock is constantly making higher highs and higher lowssignalling a strong uptrend and is also trading above its trifecta short term moving averages of 8,13 and 20 EMA. This is always considered a bullish sign for any stock and more importantly the stock has also been resilient in the recent market correction as well. The last supply zone which was formed also did not sustain and has seen prices go through it. One can continue to hold this stock keeping a stop loss of 1275 in the medium term. Also, if the stock continues to walk the bands on the daily chart, like it currently is, it is a continued bullish signal and traders should look out for bearish candlestick formations near the upper band only as a sign of any near term correction."
Commenting on the fundamental outlook, Kaustubh Pawaskar, DVP Fundamental Research at Sharekhan by BNP Paribas said “We expect Varun Beverages Ltd (VBL) to post strong double-digit revenue and earnings growth driven by mix of volume growth and realisation growth led by improved mix in the current season (in Q1 and Q2CY2023) on the backdrop of rising temperature. The company is focusing on strengthening its backend by increasing the capacities of core carbonated drinks/new products by ~30% and of new categories such as dairy beverages by 3x sensing strong opportunities emerging in the medium to long run. The company aims to achieve mid-to-high teens growth (with double-digit volume growth); OPM is expected to be at 21-22%; consistent improvement in the return profile with RoE and RoCE to be at 31% and 30%, respectively in CY2024E. The stock is currently available at attractive valuation of 49x/39x its CY2023/CY2024E earnings. We have Positive view on the stock with price target of ₹1630."