Varun Beverages share price: Buy Varun Beverages, target price Rs 1200: Axis Securities


Axis Securities has buy call on with a target price of Rs 1200. The current market price of Varun Beverages is Rs 1087.75. Time period given by analyst is one year when Varun Beverages Ltd. price can reach defined target.
., incorporated in the year 1995, is a Large Cap company (having a market cap of Rs 47228.75 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
Despite challenging global cues, the brokerage remains positive on VBL’s performance in the coming months owing to peak summer season demand, & operating leverage coming into play due to volume offtake in CY22E/CY23E. Other key growth drivers are 1) Strong execution in under-serviced territories South, West and East markets, (penetrating in semi- urban/rural areas with better refrigeration infra and VC placements), 2) Market share gains, 3) Debt reduction and healthy cash flow generation, 4) Expansion in new international geographies (Democratic Republic of Congo). It maintains BUY with TP of Rs 1,200/share as it values it at 36x March-24E EPS.


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.

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