Shares of Pepsico bottler Varun Beverages have lost 12% from their record high in a month. The stock, which hit a high of Rs 1707.10 on July 27 this year closed at Rs 1,500.25 in the previous session. The near term weakness can be attributed to profit booking in the FMCG stock. The multibagger stock has delivered returns of 190% and 395% in two years and three years, respectively.
In the previous session, the stock ended 1.44% lower at Rs 1,500.25 on BSE.
A total of 1.16 lakh shares of the firm changed hands, amounting to a turnover of Rs 17.59 crore Market cap of the firm fell to Rs 1.94 lakh crore.
In terms of technicals, the relative strength index (RSI) of Varun Beverages stands at 45.1, signaling the stock is trading neither in the overbought nor in the oversold zone. Varun Beverages shares stand lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day but higher than 150 day and 200 day moving averages.
The FMCG stock fell to a 52 week low of Rs 828.20 on October 26, 2023.
Axis Securities has a price target of Rs 1800 on the stock.
"We believe Varun Beverages is expected to continue its strong growth momentum on account of 1) Successful strategic acquisition of the Beverage Company, thereby consolidating its presence in South Africa and DRC, 2) Continued focus on expansion in its distribution reach, mainly in rural areas and 3) Commissioning of multiple green field and brownfield facilities across geographies, strengthening manufacturing capabilities and extending market reach, thus saving significant transportation costs. We believe these investments are poised to support the company’s long-term growth objectives and profitability," said Axis Securities.
Deven Choksey Research has assigned a price target of Rs 1845 on the FMCG stock.
"Varun Beverages reported robust Q2CY25 results that outperformed our estimates across the board, driven by volume improvement and strong operating performance. The company expects double-digit volume growth in the domestic market going forward, while the international market (mainly Zimbabwe) will see a rebound/recovery in growth starting from Q3CY24E," said the brokerage.
Varun Beverages clocked a 25.2 per cent year-on-year (Y-o-Y) rise in net profit to Rs 537.3 crore in Q1 against a net profit of Rs 429.1 crore in the same period last year. The company follows the January-December financial year. Net sales climbed 10.9 per cent to Rs 4,317.3 crore in Q1 from Rs 3,893 crore in the year-ago period.
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.