World-beating Pepsi bottler may keep rallying after gaining almost 1,000%

economictimes.indiatimes.com:

Varun Beverages Ltd., which says it’s responsible for about 90% of PepsiCo sales in India, is set to profit from the expanded distribution of its products to remoter parts of the country, while sales should also benefit from the trend toward increasing temperatures, analysts say. imagee “This quarter will be good for Varun as this season is the best for them,” said Lavita Lasrado, an equity research analyst at Mirae Asset Capital Markets India Pvt. in Mumbai.

“Their growth is organic and they have been adding capacity.” Varun has a history of getting a kickstart from its earnings announcement. The company’s quarterly revenue has beaten the Bloomberg average analyst estimate on 20 of the past 23 occasions, while shares have risen an average 7.4% in the month following its results. Beverage sales are likely to have increased in recent months as much of India sweltered in a heat wave, with temperatures soaring as high as 46C (115F).

Scientists estimate climate change has made extreme heat 30 times more likely in the country.Looking PriceyStill, Varun shares have pulled back from their May highs on concern valuations may have gotten overstretched. The bottler currently trades at a 12-month forward price-earnings ratio of 50 times, the most expensive out of 15 of the largest global beverage firms after clean-energy drink maker Celsius Holdings Inc. Mirae Asset’s Lasrado says further gains are possible.