Varun Beverages Stocks: The NSE (National Stock Exchange) saw the Varun Beverages stocks drop to Rs 419.40 on Monday, its 52-week low. The stock has dropped more than 28% in the last 3 months, and its 12-month ahead PE multiple has dropped from 62.8x to 43.8x. On July 29, 2024, the Varun Beverages stocks hit a record high of Rs 682.84. Therefore, it’s important to analyze the Varun Beverages stocks with respect to the recent news.
About Varun Beverages Limited
PepsiCo goods are manufactured and sold in India and other countries by Varun Beverages Limited (VBL). 60.20% of the corporation is owned by a large number of promoters. The business manages its cash flow well. The company’s 14.99-day cash conversion cycle is efficient.
| Owned By | Ravi Jaipuria |
| Competitors | Campa Cola, Nestle India Limited, Britannia Industries Limited, Adani Wilmar Limited, etc. |
| Category | FMCG blue-chip company |
CLSA Varun Beverages Upgrade
Due to its favorable risk-reward ratio, brokerage company CLSA upgraded Varun Beverages Ltd.’s recommendation from “outperform” to “high conviction outperform,” which caused shares to jump more than 2% today. The CLSA lowered the target price from Rs 770 to Rs 802, suggesting a 70% increase.
The brokerage firm stated in its note that the current pricing situation predicts a 6.2% bear case downside to the company’s earnings per share (EPS) forecasts for the calendar year 2025 and a 5% bear case downside to its EBITDA (earnings before interest, tax, depreciation, and amortization).
Correction in Varun Beverages Stocks
Varun Beverages’ twelve-month forward PE dropped from 62.8 times to 43.8 times during the last three months, representing a 28% correction in the company’s shares. According to a note from CLSA, the company’s subpar performance was caused by investors’ worries about slowing urban consumption in India, Coca-Cola’s bottling unit undergoing restructuring, and increased rivalry from Campa Cola, which retails for Rs 10.
Recent Performance of Varun Beverages Stocks
For the December 2024 quarter, Varun Beverages reported a significant surge in its consolidated net profit, which was ascribed to higher margins and volume growth. The company’s revenue has also grown significantly. Among the countries where Varun Beverages is extending its reach through acquisitions are Ghana, Tanzania, and South Africa. With the construction of new greenfield facilities in India, the corporation has also been enhancing its production capacities.
Final Verdict
Even though Varun Beverages has solid underlying fundamentals, investors need to do extensive due diligence and be mindful of the current market volatility. Before making any move, it is important to take into account one’s investment objectives and personal risk tolerance. It’s crucial to keep an eye on important levels of support and opposition and to keep up with business advancements. Overall, numerous analysts have rated the stock as a “buy” or “strong buy,” suggesting that overall analyst sentiment is favorable.
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