Varun Beverages set for outperformance, shares may rally 10%: Antique Broking
Varun Beverages (VBL), PepsiCo's largest franchise bottler in India, set for outperformance, domestic brokerage firm Antique Broking has given a target price of Rs 710 on the stock while retaining their ‘buy’ rating on the same.
This represents an upside of nearly 10% for the stock from its previous closing price.
“We believe growth in emerging categories of energy drinks and dairy products combined with capacity expansion will support volume and margin expansion. Venturing into new geographies and categories of snacks will further aid in margin expansion,” said Antique in its report.
The domestic brokerage firm believes that VBL is poised for significant growth, driven by strategic acquisitions in Africa and a strengthened financial position and its recent announcement of three acquisitions, coupled with a successful QIP, reinforces its expansion strategy and sets the stage for robust financial performance.
VBL has acquired manufacturing, selling, and distribution rights for select PepsiCo products in Tanzania and Ghana. The Tanzanian market, estimated at approximately 200 million cases with a 34% current market share for PepsiCo, was acquired for an enterprise value of Rs 1,750 crore.
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