Varun Beverages share price extended gains for the fourth consecutive session amid PepsiCo India's bottling partner reporting a 83.73 per cent rise in consolidated net profit for the quarter ended September 30, 2019. CLSA maintained a buy rating on the stock with a target price of Rs 860 per share which also created positive sentiment around the scrip.
The mid cap stock opened 1.31% higher at Rs 637 against previous close of Rs 629.75 on BSE. Later, the stock gained momentum to clock 15.44% intra day gain at Rs 727, a fresh 52-week high for the scrip. Varun Beverages share price has gained 35% since the beginning of this year and risen 38.89% during the last one year. It has climbed 14.89% in last one month.
CLSA said the company has posted strong growth in the international segment and it remains as a preferred pick in the consumer space.
The double-digit growth appears commendable in the current context and management appeared confident in its near-term outlook, the brokerage said.
On Monday, the firm reported consolidated net profit rose of Rs 81.12 crore for the quarter ended September 30, 2019 against profit of Rs 44.15 crore in the year-ago period. Revenue from operations during the quarter stood at Rs 1,776.85 crore as against Rs 1,204.47 crore in July-September 2018, Varun Beverages said in a regulatory filing. The company follows January-December financial year.
"Our India business has delivered an organic volume growth of 17.5 per cent and our international territories have registered a 27 per cent growth led by exceptional performance in under penetrated territories acquired in 2017 and early 2018," Varun Beverages Chairman Ravi Jaipuria said.
Besides, the company's key markets like Morocco, Zimbabwe, Nepal and Sri Lanka have reported double-digit growth in the quarter under review, he added.
The board also approved acquiring control of Angelica Technologies. Majority of directors in Angelica will be appointed by Varun Beverages. Varun Beverages has been associated with PepsiCo for over 27 years accounting for 80 per cent of the US firm's beverage sales volume in India.
By Aseem Thapliyal