This FMCG stock, engaged in manufacturing, bottling, and distributing carbonated soft drinks, juices, and packaged water under PepsiCo brands across India and several international markets, is in focus after SBI Securities and Axis Securities gave a target, which has an upside potential of up to 31 percent.
With a market capitalization of Rs. 1,67,283.99 crore, the shares of Varun Beverages Limited closed at Rs. 494.65 per equity share, down nearly 1.41 percent from its previous day’s close price of Rs. 501.70.
SBI Securities, a prominent brokerage firm, has recommended a “Buy” call on Varun Beverages Limited with a target price of Rs. 603 per share, indicating an upside potential of 21.90 percent.
According to SBI Securities, Varun Beverages Limited is expected to witness strong near-term growth driven by robust summer demand and the positive impact of its recent business acquisitions in Africa. These factors are likely to boost sales volumes and expand the company’s market presence, supporting its overall revenue growth.
Additionally, Axis Securities has also maintained a positive outlook on Varun Beverages Limited, setting a target price of Rs. 650 per share. This indicates an upside potential of around 31.41 percent.
Axis Securities has a positive outlook on Varun Beverages Limited (VBL), highlighting its strong growth momentum driven by key strategic moves. These include the acquisition of BevCo, boosting presence in South Africa and the DRC, and expanding its snacks portfolio into markets like Zimbabwe and Zambia.
VBL is also strengthening its rural distribution network and increasing capacity through new greenfield and brownfield plants. Additionally, the company is scaling up high-margin products like Sting energy drink and focusing more on value-added dairy, sports drinks like Gatorade, and juices, supporting long-term growth and profitability.
Varun Beverages Limited (VBL) was established in 1995 and is headquartered in Gurugram, Haryana. It is a leading Indian multinational beverage company and is PepsiCo’s second-largest bottler outside the U.S. The company makes and sells drinks like Pepsi, 7 Up, Tropicana, and Aquafina. It works across India and in countries like Nepal, Sri Lanka, Morocco, Zambia, and Zimbabwe.
Varun Beverages Limited operates in 10 countries with franchise rights and has distribution rights in 4 more countries. The company’s sales grew at a CAGR of 18 percent between 2019 and 2024.
In 2023, the company sold 913 million cases, with 737 million from India and 176 million from international markets. By 2024, sales increased to 1,124 million cases, with 821 million from India and 303 million from international markets. This shows they are growing well both in India and abroad.
Coming into financial highlights, the company’s revenue has increased from Rs. 4,317 crore in Q4 FY24 to Rs. 5,567 crore in Q4 FY25, which has grown by 28.96 percent. The net profit has also grown by 33.39 percent, from Rs. 548 crore in Q4 FY24 to Rs. 731 crore in Q4 FY25.
Varun Beverages Limited’s revenue and net profit have grown at a CAGR of 31.38 percent and 52.27 percent, respectively, over the last four years.
In terms of return ratios, the company’s ROCE and ROE should be 24.8 percent and 22.5 percent, respectively. VBL has an earnings per share (EPS) of Rs. 8.46, and its debt-to-equity ratio is 0.17x.
Written By- Nikhil Naik
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