Shares of Pepsico bottler Varun Beverages Ltd have delivered multibagger returns in a year. The stock zoomed 322% in two years and rose 109% in the last one year. Over three years, Varun Beverages shares have climbed 525% . Currently, Varun Beverages shares are trading below Rs 1,250 level. The stock has a PE ratio of 81.58 against the sector PE of 127.95.
In terms of technicals, the relative strength index (RSI) of Varun Beverages stands at 53.8, signaling the stock is trading neither in the overbought nor in the oversold zone. Varun Beverages shares are trading lower than the 5 day, 10 day and 20 day but higher than the 20 day, 50 day, 100 day, 200 day moving averages.
Varun Beverages shares were trading 1.28% lower today at Rs 1235 against the previous close of Rs 1250.85 on BSE.
A total of 795 shares of the firm changed hands, amounting to a turnover of Rs 9.82 lakh on BSE. Market cap of the firm slipped to Rs 1.60 lakh crore. The stock has a one-year beta of 0.1, indicating very low volatility during the period.
Brokerage Axis Securities has a target price of Rs 1,450 per share.
"Varun Beverages has been in our top picks portfolio since long and we continue to remain positive on the stock on a mid to long-term basis. We estimate revenue/EBITDA/PAT CAGR of 23%/30%/35% over CY22-25E as we revised our CY24-25 PAT estimates upwards by 5%/12% based on the above mentioned rationales. We maintain our BUY rating on the stock with the revised target price of Rs 1,450/share (47x CY25EPS) vs. the earlier TP of Rs 1,200/share (45x CY25 EPS)," said the brokerage.
Motilal Oswal is positive with a buy call on the stock.
"For VBL, we expect a CAGR of 17%/20%/26% in revenue/EBITDA/PAT over CY22-25. We value the stock at 55x CY25E EPS to arrive at a target price of Rs 1,285. We reiterate our BUY rating on the stock," said Motilal Oswal.
Emkay Global said, "The market is mature, but we remain confident of share gains for VBL, given its strong track record in Zimbabwe and Nepal (over 50 per cent share now). Portfolio-led pricing gain is also a big opportunity, given 50 per cent lower realisations for Bevco vs. CCBA, a Coke bottler. Post 70 per cent run-up in the last 12-month, we have a Reduce rating on Varun Beverages. However, consistent outperformance versus peers and value creation in intl. geos provide scope for further re-rating."
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.
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