Shares of PepsiCo‘s largest franchise bottler Varun Beverages Ltd (VBL) gained 2 per cent in early trade on Wednesday as brokerages upgraded ratings on the stock.
The stock traded flat at ₹476.45 on the National Stock Exchange as at 12.19 pm, after hitting an intraday high of ₹486.20.
Global brokerage CLSA upgraded the stock to high conviction outperform list as the risk-reward ratio is attractive even assuming competitive impact.
The brokerage has however partially cut the target price on the stock to ₹770 per share from ₹802 earlier, nearly 61 per cent potential upside from the previous close of ₹477.30.
CLSA added that the current pricing scenarios indicate a 5 per cent downside for EBITDA and 6.2 per cent downside to EPS in calendar year 2025. The brokerage has also cut the 2025-2027 earnings estimates by 4-5 per cent to reflect heightened competition.
Analysts also cited concerns over underperformance due to increased competition from Campa Cola and Coco Cola, and higher capex guidance and slowing urban consumption in India. Another brokerage Jefferies also has assigned buy on VBL at a target price of ₹715.
VBL recorded a 36 per cent increase in consolidated net profit at ₹195.64 crore for December quarter 2024, driven by volume growth and improved margins.
