I-Sec maintains Hold call on Varun Beverages; target price Rs 500

ICICI Securities has maintained a Hold call on Varun Beverages with an unchanged target price of Rs 500.The current market price of Varun Beverages is Rs 531.2. Varun Beverages, incorporated in 1995, is a Large Cap company with a market cap of Rs 180084.35 crore, operating in the FMCG sector.

Varun Beverages' key Products/Revenue Segments include Beverages, Other Operating Revenue, Other Services for the year ending 31-Dec-2024.



Financials
For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 5594.99 crore, up 49.86% from last quarter Total Income of Rs 3733.43 crore and up 29.34% from last year same quarter Total Income of Rs 4325.67 crore. The company has reported net profit after tax of Rs 731.94 crore in the latest quarter.

The company's top management includes Mr.Ravi Kant Jaipuria, Mr.Varun Jaipuria, Mr.Raj Pal Gandhi, Mr.Rajinder Jeet Singh Bagga, Ms.Sita Khosla, Dr.Ravi Gupta, Ms.Rashmi Dhariwal, Mr.Abhiram Seth, Mr.Anil Kumar Sondhi, Mr.Ravi Kant Jaipuria, Dr.Naresh Trehan, Mr.Varun Jaipuria, Mr.Raj Pal Gandhi, Mr.Rajinder Jeet Singh Bagga, Ms.Sita Khosla, Dr.Ravi Gupta, Ms.Rashmi Dhariwal, Mr.Abhiram Seth, Mr.Anil Kumar Sondhi, Dr.Naresh Trehan. Company has J C Bhalla & Co. as its auditors. As on 31-03-2025, the company has a total of 338 Crore shares outstanding.

Investment Rationale
ICICI Securities maintains its estimates and model Varun Beverages to report revenue/ EBITDA/ PAT CAGRs of 21%/ 20%/ 29% over CY24-26E. While they remain positive on the company's strong growth prospects, they believe its current valuation offers limited upside. I-Sec maintains HOLD with a DCF-based unchanged target price of Rs 500 at an implied P/E of 49x/39x CY25/CY26E. Key risks are steep rise in competitive pressures and faster-than-expected recovery in urban and rural economies.

Promoter/FII Holdings
Promoters held 60.23 per cent stake in the company as of 31-Mar-2025, while FIIs owned 22.98 per cent, DIIs 9.15 per cent.