Varun Beverages shares lose fizz: Key risks & triggers for the FMCG stock
Varun Beverages stock was trading 1.77% higher at Rs 521.25 on BSE. Market cap of the firm stood at Rs 1.76 lakh crore.
- Jul 30, 2025,
- Updated Jul 30, 2025 2:50 PM IST
Shares of Varun Beverages Ltd have left term investors in a fix as the multibagger FMCG stock has lost its fizz in the short term.
Investors in the Varun Beverages stock are reeling under losses this year as the scrip is down 20% on BSE. Similarly, Varun Beverages shares slipped 17.31% in the last one year.
The recent Q1 earnings show majorly met estimates, according to the brokerages.
The earnings performance they say can trigger an upside in the FMCG stock in a year. However, the Varun Beverages also faces some risks, which can stop the recovery of the PepsiCo bottler. Here's a look at their stance and price targets for the beverages stock.
YES Securities listed out two triggers for the growth in company.
1. India business volume growth trend
It said any improvement in India business volume trajectory will be seen as a sign of competitive intensity slowing down.
This is monitorable over the course of next one year.
2. EBIDTA margins
In the current environment when topline is under pressure, sustainability of margin improvement driven by operational efficiencies and strong currency in international territories will be keenly monitored over the near-term, said Yes Securities.
On the prospects of the stock and its price target, the brokerage said it maintained BUY rating with revised target price (TP) of Rs 600 against Rs 625 earlier. It assigned a target multiple of 50x on March’27E earnings per share.
The firm's revenue is expected to grow at 13% CAGR over CY24-27E 60bps EBITDA margin improvement largely driven by scale, efficiencies, channel mix improvement and backward integration, said YES Securities adding that pro-active capacity additions in domestic as well as international businesses along with long runway for distribution expansion, gives us good visibility on medium-to-long term growth.
Axis Securities sees a 15% upside potential from the current market price, and has a BUY rating on the stock.
It has reduced its price target to Rs 650 per share against the earlier target price of Rs 710 share.
It listed out key triggers for a rally in the stock.
These include:
1) The successful acquisition of BevCo, strengthening its footprint in South Africa and DRC
2) Expansion of its snacks portfolio beyond India, particularly in Zimbabwe and Zambia
3) Continued efforts to enhance distribution reach, with a focus on rural penetration
4) Commissioning of several greenfield and brownfield facilities, boosting manufacturing capacity and market access while optimising logistics costs;
5) Ongoing expansion of the high-margin Sting energy drink, coupled with a sharper focus on value-added dairy, sports drinks (Gatorade), and juice categories. These initiatives are expected to reinforce the company’s long-term growth trajectory and profitability.
Despite temporary disruption from unseasonal rains during peak summer, the firm's structural growth drivers remain intact. Axis Sec expects the company to sustain strong momentum over the medium to long term.
The brokerage cites key risks to its Estimates and target price.
They are increase in competitive intensity, RM inflation, weakening of the demand environment, and forex fluctuations.
Meanwhile, in the current session, Varun Beverages stock was trading 1.77% higher at Rs 521.25 on BSE. Market cap of the firm stood at Rs 1.76 lakh crore.
Varun Beverages reported a 5% rise in net profit for the quarter ended June 2025. Profit climbed to Rs 1325.4 crore in Q2 against Rs 1261.83 crore on a YoY basis. Revenue fell 2.5% to Rs 7017.3 crore in Q2 against Rs 7196.8 crore in the year ago period.
Shares of Varun Beverages Ltd have left term investors in a fix as the multibagger FMCG stock has lost its fizz in the short term.
Investors in the Varun Beverages stock are reeling under losses this year as the scrip is down 20% on BSE. Similarly, Varun Beverages shares slipped 17.31% in the last one year.
The recent Q1 earnings show majorly met estimates, according to the brokerages.
The earnings performance they say can trigger an upside in the FMCG stock in a year. However, the Varun Beverages also faces some risks, which can stop the recovery of the PepsiCo bottler. Here's a look at their stance and price targets for the beverages stock.
YES Securities listed out two triggers for the growth in company.
1. India business volume growth trend
It said any improvement in India business volume trajectory will be seen as a sign of competitive intensity slowing down.
This is monitorable over the course of next one year.
2. EBIDTA margins
In the current environment when topline is under pressure, sustainability of margin improvement driven by operational efficiencies and strong currency in international territories will be keenly monitored over the near-term, said Yes Securities.
On the prospects of the stock and its price target, the brokerage said it maintained BUY rating with revised target price (TP) of Rs 600 against Rs 625 earlier. It assigned a target multiple of 50x on March’27E earnings per share.
The firm's revenue is expected to grow at 13% CAGR over CY24-27E 60bps EBITDA margin improvement largely driven by scale, efficiencies, channel mix improvement and backward integration, said YES Securities adding that pro-active capacity additions in domestic as well as international businesses along with long runway for distribution expansion, gives us good visibility on medium-to-long term growth.
Axis Securities sees a 15% upside potential from the current market price, and has a BUY rating on the stock.
It has reduced its price target to Rs 650 per share against the earlier target price of Rs 710 share.
It listed out key triggers for a rally in the stock.
These include:
1) The successful acquisition of BevCo, strengthening its footprint in South Africa and DRC
2) Expansion of its snacks portfolio beyond India, particularly in Zimbabwe and Zambia
3) Continued efforts to enhance distribution reach, with a focus on rural penetration
4) Commissioning of several greenfield and brownfield facilities, boosting manufacturing capacity and market access while optimising logistics costs;
5) Ongoing expansion of the high-margin Sting energy drink, coupled with a sharper focus on value-added dairy, sports drinks (Gatorade), and juice categories. These initiatives are expected to reinforce the company’s long-term growth trajectory and profitability.
Despite temporary disruption from unseasonal rains during peak summer, the firm's structural growth drivers remain intact. Axis Sec expects the company to sustain strong momentum over the medium to long term.
The brokerage cites key risks to its Estimates and target price.
They are increase in competitive intensity, RM inflation, weakening of the demand environment, and forex fluctuations.
Meanwhile, in the current session, Varun Beverages stock was trading 1.77% higher at Rs 521.25 on BSE. Market cap of the firm stood at Rs 1.76 lakh crore.
Varun Beverages reported a 5% rise in net profit for the quarter ended June 2025. Profit climbed to Rs 1325.4 crore in Q2 against Rs 1261.83 crore on a YoY basis. Revenue fell 2.5% to Rs 7017.3 crore in Q2 against Rs 7196.8 crore in the year ago period.