Shares of Varun Beverages Ltd. hit a 52-week high as analysts bet on the company’s new launches, distribution expansion and volume growth after the first quarter of this fiscal.
The largest PepsiCo bottler outside of the U.S. saw its net profit and revenue beat analysts’ estimates in the quarter ended June 30.
Key Highlights (Consolidated, YoY)
Net profit at Rs 802.01 crore vs Rs 318.80 crore (Estimate: Rs 661 crore)
Revenue at Rs 5,017.58 crore vs Rs 2,483.04 crore (Estimate: Rs 4,193 crore)
Ebitda at Rs 1,250.62 crore vs Rs 570.8 crore (Estimate: Rs 1,067 crore)
Ebitda margin at 24.92% vs 22.99%
Dividend of Rs 2.50/share declared
Varun Beverages Chairman Ravi Jaipuria said high operating leverage due to volume growth aided Ebitda margin, and consumption is at enhanced levels across markets. The company witnessed limited impact on gross margin despite inflationary raw material environment, he said.
Shares of the company gained as much as 3.66% at open to hit a 52-week high of Rs 960 apiece. The stock’s trading volume was three times the 30-day average. Its Relative Strength Index is 73, suggesting the stock may be ‘overbought’.
The stock had risen nearly 5% on Monday after the quarterly results were announced.
Of the 17 analysts tracking Varun Beverages, 16 recommend a ‘buy’ and one suggests a ‘hold’, according to Bloomberg data. The 12-month consensus price target implies an upside of 7.5%.