Varun Beverages Ltd. share price target

Varun Beverages Ltd. declared its Q2CY18 results recently. Net Revenues grew by 26.1% to `2059.1 crs. led by robust volume growth of 21.3%. EBITDA for Q2 grew by 19.6%on a YO-Y basis to `574.8 crs. Margins contracted by 150 bps to 27.9%. PAT for Q2CY18 increased by 23.6% yoy. This was on the back of robust volume growth in India and gradual...

ICICI Securities Ltd | Retail Equity Research Revenues witnessed growth of 26.1% to | 2059.1 crore (I-direct estimate: | 2052.8 crore) led by 21.3% volume growth mainly on the back of some of the territory acquisition in Madhya Pradesh, Odisha, Bihar and Jharkhand last year. The company reported organic volume growth of 12.6% in the India business whereas it reported 9.8% on a consolidated basis during the quarter EBITDA grew 19.6% YoY to | 574.9 crore. Operating margins...

Maruti Suzuki India: Leader strengthening its leadership, Scope for margin expansion despite recent headwinds; Varun Beverages: A proxy play on beverages growth in underpenetrated markets

Varun Beverages Ltd. declared its Q1CY18 results recently. Net Revenues grew by 24.5% to `1095crs. in Q1. EBITDA for Q1 grew by 25.8%on a Y-O-Y basis to `172.7crs. Margins expanded by 20 bps to15.8%. PAT for Q1CY18 increased by 185.8% yoy. This was on the...

Revenues witnessed growth of 6.8% (24.5% growth on a comparable basis) to | 1122.3 crore (I-direct estimate | 1244.8 crore) led by 19.7% volume growth on the back of territory acquisition in Madhya Pradesh and Odisha last year. The company reported organic volume growth of 12% in the quarter Operating profit grew 25.8% to | 172.7 crore vs. | 137.2 crore in the corresponding quarter. Operating margins improved 20 bps to 15.8%. Q1 is a seasonally lean quarter for the company. Net profit...

PepsiCo India has transferred five new territories and its entire juice portfolio to Varun Beverages (VBL) over past few months. This is in line with our expectations and a testimony to VBL's proven ability over time.

Varun Beverages recent declared its Q4CY17 & CY17 results. The last quarter of the year was strong footed on the back of volumes growth. Net revenues grew by 21.4% & 3.7% to `527crs. & `4003crs. in Q4 & CY17 respectively. EBITDA for Q4 de-grew by 14% on a YO-Y basis to `22.5crs. while CY17 EBIDTA grew by 5% to `835.8 crs. Margins contracted by170 bps in Q4 to 4.3% while CY17 margins expanded by30 bps to 20.9%. Given the seasonality in the business, Q4 is a loss quarter for the company. PAT for CY17 increased by...

ICICI Securities Ltd | Retail Equity Research Revenues witnessed growth of 21.4% to | 527.4 crore (I-direct estimate | 495.3) led by volume growth from territory acquisition in MP, Odisha earlier this year. The company also acquired territory in Bihar, Jharkhand and Chhattisgarh during the quarter Operating profit declined to | 22.5 crore against | 36.3 crore in the corresponding quarter. Q4 is seasonally weak for the company as volumes of carbonated beverages decline substantially during...

(post GST shock) and benefits from recently acquired new territories (inorganic growth). Current valuations (PER of 33.2x and EV/EBITDA of 12.9x CY19E) are attractive given strong EPS growth and ROE expansion. Our TP of Rs902 is based on EV/EBITDA of 17x...

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