Shares of Varun Beverages Ltd have doubled investor wealth in two years. The multibagger FMCG stock rose 127% in two years and gained 446% in three years. The stock climbed 27% in 2024. On the other hand, the stock has recovered 44.60% from its 52-week low. The stock of the Pepsico bottler fell to a 52 week low of Rs 454.60 on December 19, 2023.
The multibagger stock slipped nearly 3% to Rs 627.70 in the current session. A total of 1.46 lakh shares of the firm changed hands, amounting to a turnover of Rs 9.11 crore. Market cap of the firm fell to Rs 2.13 lakh crore.
In terms of technicals, the relative strength index (RSI) of Varun Beverages stands at 61.2, 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 but higher than the 30 day, 50 day, 150 day and 200 day moving averages.
Vishnu Kant Upadhyay, AVP - Research and Advisory at Master Capital Services has a buy call on the stock with a target price of Rs 693-710. Stop loss can be fixed at Rs 612.
"Varun Beverages is showing a bullish breakout from a symmetrical triangle pattern on the daily chart, signaling potential upside momentum. The stock has sustained above its 21-day EMA at Rs 630, while the 100-day EMA at Rs 612 serves as strong support. The rising RSI at 61 reflects improving strength and bullish sentiment, while the MACD is in positive territory, supporting a continuation of the uptrend. Following the breakout from symmetrical triangle, prices are now all set for Rs 693 and then Rs 710, with strong support placed around Rs 612," said Upadhyay.
Brokerage Citi has a 'buy' rating on Varun Beverages with a target price of Rs 800. It cited the company’s strong market position in India and significant growth opportunities in the soft drinks sector. PepsiCo bottler's go-to-market (GTM) initiatives and its ability to create new product categories are key drivers of its expansion.
Axis Securities has an equal weight call on Varun Beverages with a target price of Rs 700.
"Varun Beverages is likely 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. The continued focus on expansion in its distribution reach, mainly in rural areas and commissioning of multiple green field and brownfield facilities across geographies, strengthening manufacturing capabilities and extending market reach, is saving on significant transportation costs. We believe these investments are poised to support the company's long-term growth objectives and profitability," said the brokerage.
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.