Buy Varun Beverages, target price Rs 1150: Motilal Oswal

Motilal Oswal has buy call on Varun Beverages with a target price of Rs 1150. The current market price of Varun Beverages Ltd. is Rs 942.45.

Varun Beverages Ltd., incorporated in the year 1995, is a Large Cap company (having a market cap of Rs 27138.18 Crore) operating in FMCG sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 1336.46 Crore, down -26.00 % from last quarter Total Income of Rs 1806.11 Crore and up 6.39 % from last year same quarter Total Income of Rs 1256.23 Crore. Company reported net profit after tax of Rs -7.24 Crore in latest quarter.


Investment Rationale
The brokerage expects a revenue/EBITDA/PAT CAGR of 28%/36%/67% over CY20–22E. The brokerage value the stock at 30x CY22E EPS.

Promoter/FII Holdings
Promoters held 66.4 per cent stake in the company as of Dec 30, 2020, while FIIs held 20.5 per cent, DIIs 5.9 per cent and public and others 7.3 per cent.