Varun Beverages Stock: Varun Beverages Ltd. (VBL) share price rose over 4 per cent in the previous trading session. VBL shares touched an intraday high of Rs 771.95 and a low of Rs 742.00 on June 14. Varun Beverages is a major player in the beverage industry and one of the largest franchisees. PepsiCo Outside the U.S. Last week, the company board recommended bonus shares in the ratio of 1:2 i.e. 1 equity share for every 2 equity shares held by the shareholders of the company as on the record date. For the January-March quarter, VBL reported a strong 26.2 per cent year-on-year sales growth. The Company’s Profit After Tax (PAT) almost doubled or grew 98.2 per cent year-on-year to Rs 271 crore from Rs 137 crore driven by improved margins, reduced financing costs and higher profitability from our international operations.
stock price history
Shares of Varun Beverages have rallied around 33.33 per cent so far in 2022, 48 per cent in the past one year, and have given investors massive returns of around 180 per cent in the last two years. Going forward, the brokerage is likely to see a rise of up to 20 percent.
In the previous session, it touched an intraday high of Rs 771.95 and an intraday low of Rs 742.00. It was trading with a volume of 32,738 shares as compared to its thirty-day average of 185,636 shares, a decrease of -82.36 per cent. The stock touched its 52-week high of Rs 1,166.50 and 52-week low of Rs 710.00 on June 2, 2022 and July 5, 2021. It is currently trading down 34.05 per cent from its 52-week high and 8.35 per cent above its 52-week low.
What should investors do?
Analysts at Motilal Oswal Financial Services expect a strong recovery to continue on the back of increased consumption outside home, with offices opening and travel activity; increase in volume in new areas; Strong growth in products launched; and increasing refrigeration in rural/semi-rural areas.
“Considering its 1QCY22 performance, we increase our CY22/CY23 earnings estimate by 7 per cent/6 per cent as the growth trajectory continues with strong demand from domestic consumption and strong support from newly launched products. are supposed to. The domestic brokerage firm said, we expect Revenue / EBITDA / PAT CAGR of 16 per cent / 21 per cent / 38 per cent from CY21-23. It maintained a ‘Buy’ rating on the stock with a target price of Rs 1,230 per share, which is up 16 per cent. “Development was limited due to capacity constraints (currently 100 per cent utilisation). Once new capabilities are rolled out (probably by CY23), the growth will be exponential,” it added.
Analysts at ICICI Securities model Varun Beverages to report revenue and PAT CAGR of 13.8 per cent and 29.3 per cent, respectively, in CY21-CY23. “It continues to benefit from its relationship with PepsiCo, pan-India distribution, backward integration and growth in domestic consumption. However, we believe at the current valuation (40x CY23E), the stock price has increased and the stock has been priced higher. 1,030 (38x CY23E) with a DCF-based target price of Rs. 1,030 (38x CY23E),” the brokerage said.
According to analysts, major downside risks include competitive pressures and a steep rise in input prices; Delay in launch/failure of new products; and slowdown in urban and rural economies. “We remain positive on Varun’s business model, but the upside in share prices has been restricted at current valuations,” he said.
VBL registered a year-on-year growth of 16 per cent and 32 per cent respectively in the domestic and international volumes on the back of strong execution and early summer. Kotak Securities said in its Institutional Equity Report, “Even though we were expecting a decent CY22, VBL exceeded our expectations on the back of strong volume growth aided by distribution-led share gains (1) in South/West. ) Sting’s spectacular growth (6-7 percent of sales growing at 100 percent+) and (3) unusually hot summer. We continue to see strong underlying industry growth, market share gains and Sting, Tropicana And CY22-24E volumes/revenues grew 8-10 per cent to factor in stronger traction in dairy drinks (from about 2-3 per cent in 1QCY22 to 9 per cent in CY19).”
The brokerage raised CY22-24 EPS estimates by 10-12 per cent, rollover and revised FV from Rs 1,100 to Rs 1,275. It repeated the ‘buy’ call on the stock.
The views and investment suggestions of experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decision.
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