Buy Varun Beverages, target price Rs 1300: ICICI Direct

ICICI Direct has buy call on Varun Beverages with a target price of Rs 1300. The current market price of Varun Beverages is Rs 1134.05. Time period given by analyst is one year when Varun Beverages Ltd. price can reach defined target.

Varun Beverages Ltd., incorporated in the year 1995, is a Large Cap company (having a market cap of Rs 49385.26 Crore) operating in FMCG sector.

Varun Beverages Ltd. key Products/Revenue Segments include Beverages, Other Operating Revenue, Other Services for the year ending 31-Dec-2020.



Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 2835.98 Crore, up 63.44 % from last quarter Total Income of Rs 1735.19 Crore and up 26.23 % from last year same quarter Total Income of Rs 2246.62 Crore. Company reported net profit after tax of Rs 271.09 Crore in latest quarter.

Investment Rationale
Varun Beverage’s share price has given 4.9x return (from Rs 215 in April 2017 to Rs 1059 in April 2022). It revises CY23 earnings number upwards with robust volume growth, margin expansion through operating leverage & reduction in debt & interest. It upgrades the stock from HOLD to BUY rating.

Promoter/FII Holdings
Promoters held 64.89 per cent stake in the company as of 31-Mar-2022, while FIIs owned 21.03 per cent, DIIs 7.21 per cent.