Shares of Varun Beverages Ltd (VBL), the largest franchise bottler for PepsiCo, experienced a slight moderation in the range of ₹471-486 on Wednesday following upgrades in ratings by brokerages.
Closing flat at ₹476.45 on the BSE after reaching an intraday high of ₹486.30, VBL’s technical outlook shows support at the 460 level with resistance at 486. According to Jigar S Patel, Senior Manager – Technical Research at Anand Rathi Shares and Stock Brokers, a clear daily close above 486 could signify further upside potential, while a close below 460 may indicate weakness.
Global brokerage CLSA has upgraded VBL to its high conviction outperform list due to an attractive risk-reward ratio despite potential competitive impacts. Although the target price has been partially reduced to ₹770 from ₹802, representing a nearly 61% upside from the previous close, CLSA remains optimistic about the stock.
Concerns over underperformance due to increased competition from Campa Cola and Coco Cola, higher capex guidance, and slowing urban consumption in India have been noted by analysts. However, VBL recently reported a 36% increase in consolidated net profit for the December quarter of 2024, driven by volume growth and improved margins.
Additionally, Jefferies has issued a buy rating on VBL with a target price of ₹715. The company’s stock remains in focus as brokerages see potential upside despite the challenges in the competitive landscape and shifting consumption trends.
Published on March 5, 2025.
