Varun Beverages Ltd shares surged 2.08% to ₹590.20 on the BSE today, following the company’s announcement of its Q3 results for the 2024 calendar year. The FMCG giant reported a consolidated net profit of ₹628.82 crore for the quarter ending September 2024, marking a significant increase of 22.4% compared to ₹514.06 crore in the same period last year. Additionally, the company’s revenue from operations reached ₹4,932.1 crore, up 25.2% from ₹3,937.8 crore in the corresponding quarter of the previous year.
Despite heavy rains affecting sales, Varun Beverages saw domestic volume growth of 5.7% and international volume growth of 7.9% organically, as noted in its BSE filing. Mr. Ravi Jaipuria, Chairman of Varun Beverages Limited, expressed satisfaction with the quarter’s performance, highlighting a consolidated revenue growth of 24.1%, driven by an expanded distribution network, increased product penetration, and favorable demand trends in key markets. The company also improved its EBITDA margins by 117 basis points, resulting in a robust 30.5% growth in EBITDA and a healthy 22.3% increase in profit after tax for the quarter.
In terms of stock performance, Varun Beverages shares have seen a 52-week high of ₹682.84 (on July 29, 2024) and a low of ₹331.28 (on October 26, 2023). Despite a recent decline of 4.43% over the past week and 10% over the past month, the stock has gained 57% over the last year and provided an impressive 188% return over the past two years.
Looking at the shareholding pattern, Foreign Institutional Investors (FIIs) have slightly reduced their holdings from 25.79% to 25.32% in the June 2024 quarter, while the number of FII investors increased from 1,112 to 1,158. Mutual Funds raised their stake from 2.26% to 2.42%, with the number of schemes increasing from 31 to 33. Conversely, institutional investors have decreased their holdings from 29.95% to 29.86%. Notably, the Government Pension Fund Global holds a 2.36% stake in the company.
Brokerage firms are optimistic about Varun Beverages, with Citi issuing a buy recommendation and a target price of ₹800 per share. HSBC also initiated coverage, recommending a buy call with a target of ₹780 per share. Analysts believe the company could enhance its speed and market share by adopting advanced tools ahead of its competitors.
Varun Beverages Limited is one of the largest franchisees of PepsiCo outside the USA, manufacturing, distributing, and selling a diverse range of carbonated and non-carbonated beverages, including packaged drinking water under PepsiCo’s trademarks.
Disclaimer: The information provided is for informational purposes only and should not be considered as financial or investment advice. Stock market investments are subject to market risks, and past performance is not indicative of future results. Please consult with a certified financial advisor before making any investment decisions. The views and recommendations mentioned are those of third-party brokerage firms and analysts and do not reflect the opinions or endorsement of the writer.
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