Varun Beverages shares: Buy, hold or sell? Morgan Stanley, CLSA, others share target prices

Even as Varun Beverages Ltd (VBL) shares declined 8 per cent in the previous session, most brokerages maintained 'Buy' on the stock after the PepsiCo bottler's Q2 results. The list included foreign brokerages such as Goldman Sachs, CLSA, Investec, Jefferies and Citi. Morgan Stanley and JPMorgan suggested 'overweight' on the stock, while Ambit Capital, Antique Stock Broking, DAM Capital, Nuvama and JM Financial are among domestic brokerages recommending a 'Buy' on the stock.

Analysts said VBL is relatively better placed than peers in terms of margin, with strategic stocking of raw material (RM) and growing share of low-sugar products - 73 per cent  mix in H1CY26. This, they said, was reflected in the Q2 Ebitda margin gain of 40 bps in India business.

Elara Securities, which suggested the lowest target on VBL at Rs 490 so far, said near-term stock performance will depend on the success of at least one of the recently launched products or the execution of new initiatives that can provide greater visibility into sustaining double-digit volume growth. The stock settled at Rs 429.50 apiece on Tuesday.

Among brokerages, CLSA's target on the stock at Rs 629 was the highest, Bloomberg data compiled by Business Today suggested. UBS set a target of Rs 585, Morgan Stanley pegged the stock at Rs 557, Jefferies assigned a target of Rs 615, Citi set a target of Rs 580, while Goldman Sachs values the stock at Rs 550. JM Financial's target of Rs 505 has been the lowest one, at the time of preparing this report.

Emkay Global said it has cut its target by 15 per cent to Rs 525,  citing a 3-4 per cent earnings cut and 11 per cent drop in its target multiple on multiple climate-related disruptions in the peak season over 2023-26.

"However, we retain BUY led by a strong execution track record, continued outperformance vs FMCG peers, and growth-oriented management. India topline growth of 13 per cent was impacted by climatic disruptions in April 2026, though March-June saw healthy volume growth of over 20 per cent. The organic international volume growth was robust at 25 per cent, backed by broad-based performance across geographies," Emkay said.

MOFSL finds Varun Beverages quarterly results healthy, with 20 per cent year-on-year (YoY) volume growth, led by 14 per cent growth in India and 38 per cent growth in international geography. It said net realisation per case improved 1.2 per cent at the consolidated level, fueled by realization growth in international territories.

"Going forward, VBL is expected to deliver healthy performance, driven by capacity expansion, a strong distribution reach, and continued expansion of its beverage portfolio. Additionally, the ramp-up of international operations, recovery in Zimbabwe, and expansion of the snacks business are expected to support revenue growth and margins," MOFSL said.

This brokerage suggested a target of Rs 560 on the stock.