Varun Beverages shares stand higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 150 day and 200 day but lower than the 100 day moving averages. Shares of Varun Beverages Ltd ended 6% higher in an otherwise weak broader market today. The multibagger stock is down 6% in one month and three months, respectively. In six months too, it could gain only 5.5%. On the other hand, the stock has recovered 84% from its 52-week low in a year. The stock of the Pepsico bottler fell to a 52 week low of Rs 331.28 on October 26, 2023. Shares of Varun Beverages have gained 196% in two years and 450% in three years.
The multibagger stock ended at Rs 610.35, up 5.92% in the current session. A total of 7.94 lakh shares of the firm changed hands, amounting to a turnover of Rs 47.56 crore. Market cap of the firm climbed to Rs 1.98 lakh crore.
In terms of technicals, the relative strength index (RSI) of Varun Beverages stands at 42, signaling the stock is trading neither in the overbought nor in the oversold zone. Varun Beverages shares stand higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 150 day and 200 day but lower than the 100 day moving averages.
Axis Securities has recommended a BUY rating on the stock and assigned a 52x Sep-EPS to arrive at a price target of Rs 700/share. Key Risks to its Estimates and target price are an increase in competitive intensity, RM inflation, weakening of demand environment and forex fluctuationsan.
"VBL is poised to sustain its strong growth momentum, driven by several strategic factors: 1) The successful acquisition of BevCo, which strengthens its market presence in South Africa and DRC; 2) Expansion of its snacks portfolio beyond India, with a focus on markets such as Zimbabwe and Zambia; 3) A continued push to expand its distribution network, particularly in rural areas; 4) The commissioning of various greenfield and brownfield facilities, boosting manufacturing capacity and market coverage while optimizing transportation costs; and 5) The expansion of its high-margin Sting energy drink and a greater focus on value-added dairy products, sports drinks (Gatorade), and juice offerings. These initiatives are anticipated to underpin the company's long-term growth trajectory and enhance profitability," said Axis Securities.
Kotak Institutional Equities finds the fair value of the stock at Rs 640.
Brokerage KR Choksey has a buy call on the stock. Varun Beverages and has recommended buy call on the stock. It has assigned a price target price of Rs 738 for the stock.
"We maintain our CY26E adjusted EPS, mainly due to strong revenue growth, geographic expansion, and cost efficiencies. We re-iterate our BUY rating, valuing the company with a maintained PE multiple of 57x on a CY26E EPS of Rs 12.9. Consequently, we arrive at a target price of Rs 738," said KR Choksey.
Global brokerage firm HSBC has a 'Buy' call and a price target of Rs 780 on the stock.
The Pepsico bottler reported a 22% rise in net profit for the September 2024 quarter. Earnings in the last quarter met street estimates. Net profit climbed to Rs 628.82 crore in Q3 of this fiscal against Rs 514 crore in the September 2023 quarter. Revenue from operations in Q3 climbed 25.3% to Rs 4932 crore against Rs 3937.7 crore in the corresponding period of the previous fiscal.
EBITDA rose 30.5% in Q3 to Rs 1,151 crore from Rs 882.1 crore in the Q3 of previous fiscal.
Varun Beverages follows a calendar year of reporting (January to December).
Varun Beverages is a beverage company. It operates franchisee of PepsiCo. The company produces and distributes a range of carbonated soft drinks (CSDs), as well as a large selection of non-carbonated beverages (NCBs), including packaged drinking water sold under trademarks owned by PepsiCo.