Varun Beverages: Motilal Oswal Sees Potential for Price Appreciation to Rs 600
Varun Beverages Posts Strong Quarter, Raises Earnings Estimates
Varun Beverages (VBL) has reported a robust quarter, driven by significant volume growth across both domestic and international markets. The company's consolidated volume growth stood at approximately 16% year-over-year (YoY), with a notable 14.4% increase in India and a substantial 21.4% rise in international territories.
The company's net realization per case saw a 1.6% improvement at the consolidated level, primarily due to favorable currency movements in international territories. However, this gain was partially offset by a 1.5% dip in net realizations in India, resulting from pack upsizing and targeted price-point launches.
Motilal Oswal's Research Team Raises Earnings Estimates
Based on the company's performance, Motilal Oswal's research team has revised their earnings estimates for Varun Beverages. For the fiscal years 2025-2027, they project a compound annual growth rate (CAGR) of 16% in revenue, 16% in earnings before interest, taxes, depreciation, and amortization (EBITDA), and 20% in profit after tax (PAT).
| Metric | CY25 | CY26 | CY27 |
|---|---|---|---|
| Revenue CAGR | - | 16% | 16% |
| EBITDA CAGR | - | 16% | 16% |
| PAT CAGR | - | 20% | 20% |
The research team has also increased their earnings estimates for CY26E and CY27E by 4% and 6%, respectively. They maintain a BUY rating on the stock with a target price of INR600 (47x CY26E earnings per share).
Investor Takeaway
Investors should consider buying Varun Beverages stock with a target price of INR600.
More in Market
SpaceX Seeks Record $75 Billion IPO, Potentially Positioning Elon Musk as the World's First Trillionaire
Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
