Varun Beverages Ltd. share price target

With a 25% upside potential from the CMP, we maintain our BUY rating on the stock.

VBL reported a strong and largely in-line quarter. India revenue growth was better at ~18% (vs expectation of ~15%), helped by ~16%/2% growth in volume/realization.

Quarterly Update Q1CY25

CY24 was a transformative year for Varun Beverages Limited (VBL), marked by strong growth, global expansion, and unwavering sustainability commitments.

We initiate coverage on Varun Beverages Ltd. with a “BUY” rating. We like the company for its demonstrated execution capabilities in India, further headroom for distribution expansion in India, continued territorial expansion in Africa, international margin improvement and strengthening ties with PepsiCo.

We maintain our BUY rating on the stock.

Varun Beverages (VBL) reported a revenue growth of 38% YoY in 4QCY24, led by volume growth of 38% YoY, which was majorly driven by the volume addition from South Africa and the Democratic Republic of Congo (DRC).

VBL's long-term outlook remains positive and with 23% upside potential from CMP we maintain a BUY rating on the stock.

VBL has approved SPA to acquire 100% stake in SBCT/SBCG, which own manufacturing/distribution rights for NARTD beverages in Tanzania and Ghana.

With an 18% upside potential from the CMP, we maintain our BUY rating on the stock

Takeaways: (1) Varun (VBL) has aggressively ramped up production (operating at maximum utilisation) at its recently commissioned DRC facility, due to strong demand. It plans to scale up production capacity at DRC in a phased manner.

Quarterly Update Q3CY24

Quarterly Update Q1FY25

With an 14% upside potential from the CMP, we maintain our BUY rating on the stock.

Varun Beverages (VBL) reported a revenue growth of 29% YoY in 2QCY24, led by volume growth (up 28% YoY). This was primarily driven by a domestic volume growth of 23% YoY.

Varun Beverages (VBL) has inched closer to its goal of becoming a full-scale F&B
player with the recent agreement with PepsiCo to manufacture, distribute, and sell
snack food items in Zimbabwe and Zambia. We believe this agreement will serve as a building block for VBL’s snack food business.

With a 18% upside potential from the CMP, we maintain our BUY rating on the stock.

Highlights: (1) Continued buoyant margin performance led by lower input prices, higher realisation and benefits of strategic cost-saving initiatives undertaken, (2) international business strengthened further, following the acquisition of BevCo (South Africa and surrounding region) and agreement signed for manufacturing of snacks from May’25 in Morocco market,