Varun Beverages shares in a free fall, hit 52-week low; here's what analysts say

Shares of Varun Beverages Ltd slipped 4% to their 52-week low, falling for the third straight session (intraday) on Monday. Varun Beverages stock fell to Rs 419.40 against the previous close of Rs 435.45. Market cap of the PepsiCo bottler fell to Rs 1.47 lakh crore. A total of 2.51 lakh shares of the firm changed hands, amounting to a turnover of Rs 11.68 crore. The multibagger stock fell 25% in a year but zoomed 59% in two years. 

In terms of technicals, the relative strength index (RSI) of Varun Beverages stands at 28.9, signaling the stock is trading in the overbought zone. Varun Beverages shares are trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 150 day and 200 day moving averages. 

The stock has a beta of 0.8, indicating very low volatility in a year. 

Ameya Ranadive Chartered Market Technician, CFTe, Sr Technical Analyst, Stoxbox said, "Varun Beverages Ltd has witnessed a sharp breakdown, currently trading at Rs 435, with heavy volumes confirming the selling pressure. The stock has decisively breached key support levels, and the short-term trend remains weak. A wait-and-watch approach is advisable rather than bottom-fishing at current levels. Confirmation of stabilization, either through a price consolidation or bullish divergence in momentum indicators, is necessary before considering fresh positions. Until then, the risk of further downside remains. Traders should monitor volume activity and any signs of trend reversal before making a decision."

Jigar S Patel from Anand Rathi said, "Support will be at Rs 405 and resistance will be Rs 445. A decisive move above the Rs 445 level may trigger a further upside of Rs 475. The expected trading range will be between Rs 400 and Rs 475 for the short-term"

Mandar Bhojane, Equity Research Analyst, Choice Broking said, "The stock is forming lower lows and lower highs, which indicates a persistent bearish trend. The stock has declined by 35% from its all-time high and has breached the critical Rs 452 support level. Additionally, it is trading below the 20-day, 50-day, and 200-day EMAs, reinforcing the bearish sentiment. If the bearish trend continues, VBL may approach a key support zone between Rs 382 and Rs 406. This area could act as a potential accumulation zone if bullish reversal signals emerge."

"However, for a meaningful recovery, the stock needs to reclaim and sustain above the ?452 level, which now acts as resistance. A confirmed breakout above this level would indicate a potential shift in sentiment, providing an attractive entry point for long positions. For traders looking to take a position at the current market price of Rs 422, a target range of Rs 455–Rs 460 can be considered. However, risk management is crucial, and placing a stop-loss around Rs 405 would help protect capital in case of further declines. Until a decisive reversal pattern forms, caution is advised, with a preference for monitoring key support and resistance levels before making new commitments," added Bhojane.

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.