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    Buy Varun Beverages, target price Rs 1100: Axis Securities

    Synopsis

    Varun Beverages Ltd., incorporated in the year 1995, is a Large Cap company (having a market cap of Rs 60375.64 Crore) operating in FMCG sector.

    buyiStock
    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.
    Axis Securities has buy call on Varun Beverages with a target price of Rs 1100. The current market price of Varun Beverages Ltd. is Rs 928.9. Time period given by analyst is one year when Varun Beverages Ltd. price can reach defined target.

    Varun Beverages Ltd., incorporated in the year 1995, is a Large Cap company (having a market cap of Rs 60375.64 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-2021.


    Financials
    For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 4965.29 Crore, up 75.08 % from last quarter Total Income of Rs 2835.98 Crore and up 98.02 % from last year same quarter Total Income of Rs 2507.45 Crore. Company reported net profit after tax of Rs 802.01 Crore in latest quarter.


    Investment Rationale
    The brokerage believes all near-term challenges (RM inflation, top-line growth) are behind the company and VBL is expected to perform well going ahead on account of 1) Newly acquired territories that will see normalcy of operations and market share gains post COVID-19 disruptions, 2) The management’s continued focus on the efficient go-to-market execution in acquired and underpenetrated territories as can been seen from its recently commissioned Bihar plant operations (it has started gaining market share), 3) Expand distribution reach by 8-10% from current 3 Mn outlets as it penetrates further into weaker territories, 4) Robust growth in the International geographies, and 5) Sustenance of healthy double-digit volume growth in the medium to longer term. Based upon the above thesis, the brokerage factored in Revenue/EBITDA/ PAT CAGR of 25%/30%/45% over CY21-24E and arrive at a revised TP of Rs 1,100/share vs. Rs 880/share earlier), valuing it at 36x June-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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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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