Shares of Pepsico bottler Varun Beverages are set to hit the Rs 1,900 mark in a year, according to brokerage Anand Rathi. The multibagger stock has delivered returns of 325% and 523% in two years and three years, respectively. In the previous session, the stock ended 3.75% higher at Rs 1638 on BSE. It closed at Rs 263 on June 16, 2021, delivering multibagger returns of 523% in three years.
It also hit a record high of Rs 1,650 on Friday. The FMCG stock fell to a 52 week low of Rs 754.35 on June 26, 2023.
A total of 2.75 lakh shares of the firm changed hands, amounting to a turnover of Rs 44.43 crore on BSE in the previous session. Market cap of the firm rose to Rs 2. 12 lakh crore.
Anand Rathi has re-initiated a ‘BUY’ coverage on the FMCG stock.
“We expect Varun Beverages to see strong growth going forward due to many factors such as: 1) Strategic investment in enhancing production capabilities and making new acquisitions which have significantly strengthened their global presence, 2) Successful completion of the strategic acquisition of the Beverage Company (BevCo) in South Africa marking their entry in African region.
3) Increasing its presence in the domestic market and looking for exports opportunities, 4) Strong heatwaves prevailing across India during the summer quarters,” said the brokerage.
In terms of technicals, the relative strength index (RSI) of Varun Beverages stands at 71.5, signaling the stock is trading in the overbought zone. Varun Beverages shares stand higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
Varun Beverages reported 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. The bottler reported volume growth of 7.2 per cent, with a 3.5 per cent growth in net realisation per case in the first quarter. Profit before interest, depreciation and tax (Pbidt) rose 23.5 per cent to Rs 997 crore from 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.