Varun Beverages stock slips 4% in 2 days; JM Financial sees 20% upside potential
Brokerage firm JM Financial retained its ‘Buy’ call on the beverage major following its September quarter results.
- Oct 31, 2025,
- Updated Oct 31, 2025 11:03 AM IST
Shares of Varun Beverages Ltd (VBL) remained under pressure on Friday, extending losses for the second straight session. The stock has now declined over 4 per cent in just two trading days on the BSE. At last check, it was down 2.32 per cent at Rs 473.90 apiece.
Brokerage firm JM Financial retained its ‘Buy’ call on the beverage major following its September quarter results. The brokerage rolled forward its estimates and set a revised target price of Rs 570, implying a potential upside of around 20 per cent from current levels.
The brokerage described the third quarter as a soft quarter. VBL’s consolidated sales and EBITDA for Q3CY25 were around 2–3 per cent below JM Financial’s projections, primarily due to weaker-than-envisaged sales performance in International business.
During the quarter, consolidated revenue rose 2 per cent year-on-year (YoY) to Rs 48.9 billion. Overall volumes grew 2.5 per cent YoY despite adverse weather conditions in India. Domestic volumes were flat, outperforming JM Financial’s estimate of a 2 per cent decline, while international volumes were up 9 per cent YoY, missing expectations for mid-teen growth.
On the profitability front, JM Financial highlighted that the India business showed superior execution and stable gross margin, calling it impressive given the adverse monsoons/rising competitive intensity.
VBL’s management maintained an optimistic outlook on its India business, noting that October saw double-digit volume growth. This, management believes, suggests that recent volume weakness was due to erratic weather rather than any significant market share loss. The international business, meanwhile, is expected to revert to double digit sales growth, supported by strong demand in South Africa and a recovery in Zimbabwe and Congo.
As part of its long-term growth strategy, VBL has expanded its product portfolio by adding new categories such as alcoholic beverages, frozen foods, noodles etc. to its object clause. The company has also entered an exclusive distribution agreement with Carlsberg for African markets. Under this arrangement, VBL will test market beer segment in parts of Southern Africa, which are considered whitespace for Carlsberg.
Shares of Varun Beverages Ltd (VBL) remained under pressure on Friday, extending losses for the second straight session. The stock has now declined over 4 per cent in just two trading days on the BSE. At last check, it was down 2.32 per cent at Rs 473.90 apiece.
Brokerage firm JM Financial retained its ‘Buy’ call on the beverage major following its September quarter results. The brokerage rolled forward its estimates and set a revised target price of Rs 570, implying a potential upside of around 20 per cent from current levels.
The brokerage described the third quarter as a soft quarter. VBL’s consolidated sales and EBITDA for Q3CY25 were around 2–3 per cent below JM Financial’s projections, primarily due to weaker-than-envisaged sales performance in International business.
During the quarter, consolidated revenue rose 2 per cent year-on-year (YoY) to Rs 48.9 billion. Overall volumes grew 2.5 per cent YoY despite adverse weather conditions in India. Domestic volumes were flat, outperforming JM Financial’s estimate of a 2 per cent decline, while international volumes were up 9 per cent YoY, missing expectations for mid-teen growth.
On the profitability front, JM Financial highlighted that the India business showed superior execution and stable gross margin, calling it impressive given the adverse monsoons/rising competitive intensity.
VBL’s management maintained an optimistic outlook on its India business, noting that October saw double-digit volume growth. This, management believes, suggests that recent volume weakness was due to erratic weather rather than any significant market share loss. The international business, meanwhile, is expected to revert to double digit sales growth, supported by strong demand in South Africa and a recovery in Zimbabwe and Congo.
As part of its long-term growth strategy, VBL has expanded its product portfolio by adding new categories such as alcoholic beverages, frozen foods, noodles etc. to its object clause. The company has also entered an exclusive distribution agreement with Carlsberg for African markets. Under this arrangement, VBL will test market beer segment in parts of Southern Africa, which are considered whitespace for Carlsberg.