Varun Beverages share price today: Shares of Varun Beverages Ltd have turned weak in the short term. 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 was trading at Rs 611 in the current session. It was down 3% compared to the previous close of Rs 628.80 on BSE.
With its weak trade, Varun Beverages was all set to snap two days of gaining streak today.
A total of 3.99 lakh shares of the firm changed hands, amounting to a turnover of Rs 24.39 crore. Market cap of the firm slipped to Rs 1.98 lakh crore.
In terms of technicals, the relative strength index (RSI) of Varun Beverages stands at 57.2, signaling the stock is trading neither in the overbought nor in the oversold zone. Varun Beverages shares stand lower than the 30 day, 50 day, 100 day but higher than the 5 day, 10 day, 20 day, 150 day and 200 day moving averages.
Brokerage KR Choksey bullish on 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.
Varun Beverages is the second-largest soft drink bottler in India, with 28% of the carbonated soft drink (CSD) market share. Coca-Cola’s fragmented bottling system is larger, with a 55% market share.
HSBC said a near-term growth driver for the company was it currently reaches 40 lakh outlets and plans to add 300,000 to 400,000 outlets per year to drive higher per-capita soft drink consumption.
On the other hand, Nuvama has reduced its price target to Rs 688 post Q3 earnings.
"Planned QIP proceeds of Rs 7,500 crore shall be utilised for debt reduction, acquisitions and capacity expansion in India. Retain 'BUY', but we are cutting the target P/E from 65x to 60x to factor in the disruption from Campa Cola to Varun Beverages' India volumes and the high base in Q4CY24 of 19%. This yields a revised target price of Rs 688 (earlier Rs 741)," said Nuvama.
ICICI Securities has maintained its hold call on the Varun Beverages stock with a price target of Rs 606. "Maintain HOLD with a DCF-based unchanged target price of Rs 606 (adjusted for the 2:5 stock split; implied P/E of 62/49x CY25/26E)," said the brokerage.
"We model Varun Beverages to report revenue and PAT CAGRs of 21.8% and 24.8%, respectively, over CY23-26E. While we remain positive on the company's strong growth prospects, we believe its current valuation is stretched," added ICICI Securities.
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.