Varun Beverages shares rise after board approves expansion in Zimbabwe, Zambia

Shares of Pepsico bottler Varun Beverages rose over 3% on Monday after the firm said it would expand its presence in the South African nations of Zimbabwe and Zambia. The objective of the expansion is enhancement of portfolio with PepsiCo. Varun Beverages shares gained 3.11% to Rs 1633 on Monday against the previous close of Rs 1583.60 on BSE. Market cap of the firm climbed to Rs 2.10 lakh crore.

A total of 0.29 lakh shares of the firm changed hands, amounting to a turnover of Rs 4.63 crore on BSE. The stock zoomed 292% in two years and rose 510% in three years.

The stock touched its all-time high of Rs 1,673.70 on June 19, 2024 and fell to its 52 week low of Rs 785 on July 24, 2023.

The Board of Directors has approved to enter into following exclusive agreements:

(1) Varun Foods (Zimbabwe) (Private) Limited (wholly-owned subsidiary of the Company) and Premier Nutrition Trading LLC, Dubai (subsidiary of PepsiCo Inc.) to manufacture, distribute & sell snacks “Simba Munchiez” in the territory of Zimbabwe on or before October 1, 2025 (i.e. the expected date of start of commercial production from our own manufacturing facility).

(ii) Varun Beverages (Zambia) Limited (subsidiary of the Company) and Premier Nutrition Trading LLC, Dubai (subsidiary of PepsiCo Inc.) to manufacture, distribute & sell snacks “Simba Munchiez” in the territory of Zambia on or before April 1, 2026 (i.e. the expected date of start of commercial production from our own manufacturing facility).

Each of the newly incorporated SPV above will involve the capex with approximately $7 Million (approx. Rs. 60 crore).

 The relative strength index (RSI) of Varun Beverages stands at 51, signaling the stock is trading neither in the overbought and nor in the oversold zone. Varun Beverages shares are trading higher than the 5 day, 10 day, 20 day 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

Varun Beverages is a beverage company. It operates franchisee of PepsiCo. The company produces and distributes a range of carbonated soft drinks (CSDs), as well as a large selection of non-carbonated beverages (NCBs), including packaged drinking water sold under trademarks owned by PepsiCo.