Varun Beverages shares move at snail pace; buy, sell or hold?

Shares of Varun Beverages have risen just 8% in four months from their 52-week low. The multibagger stock, which is currently under bear attack fell to a 52 week low of Rs 419.40 on March 3, 2025 was trading at Rs 455.10 in the current trading session. The stock is trading below all short term and long-term moving averages, indicating a downtrend in historical terms. 

The multibagger stock has clocked negative returns for period up to a year. However, the stock rose 190% in three years and gained 633% in five years. 

In the current session, Varun Beverages stock was trading 1.15% higher at Rs 455.80 on BSE. Market cap of the firm stood at Rs 1.54 lakh crore. A total of 0.56 lakh shares of the firm changed hands, amounting to a turnover of Rs 2.54 crore. 

AR Ramachandran, SEBI registered Independent analyst says, "Varun Beverages stock price is  bearish on the Daily charts with strong resistance at Rs 460. A Daily close below the support of Rs 447 could lead to a target of Rs 419 in the near term."

Kunal Kamble, Sr. Technical Research Analyst at Bonanza Portfolio said, "Varun Beverages is currently forming a Lower Low, Lower High structure, indicating a continuation of the bearish trend. The stock is trading below all major EMAs, confirming the prevailing weakness. The RSI is also positioned in the lower range, reflecting ongoing negative momentum.

The DI- is trading above DI+, further supporting the bearish outlook, while the ADX trading above both DI lines indicates strong trend strength, reinforcing the ongoing downtrend."

"If the stock is well placed to trade near Rs 420, if it breaks below Rs 420 it may lead to further downside toward the Rs 370– Rs 350 zone. However, a decisive move above Rs 469 would invalidate the current negative bias and could signal a potential trend reversal," added Kamble. 

Axis Securities, meanwhile, has a price target of Rs 650 (a 42% upside) on the FMCG stock. 

Axis is bullish on the stock's growth,driven by multiple levers: 

(1) The BevCo acquisition is strengthening its presence in South Africa and the DRC; 

(2) International expansion of its snacks business, especially into Zimbabwe and Zambia; 

(3) Deepening rural distribution to widen market reach; 

(4) Capacity enhancement through new greenfield and brownfield facilities, improving operational efficiency;

(5) scaling high-margin brands like Sting, alongside increased focus on value added dairy, sports drinks, and juices. These strategic initiatives are set to support sustained revenue and margin expansion. 

It expects revenue/EBITDA/PAT to grow at 23%/24%/32% CAGR over CY24-27E. 

Global brokerage HSBC is bullish on Varun Beverages in the long term. It has a 'Buy' call with a target price Of Rs 670

The brokerage said recent market concerns seem overdone. Bad weather & competition, typical industry brand innovation miss don't justify a fall in equity value. The company is driving repeat consumption in urban and rural India and is still one Of the best beverage growth opportunities.

The stock is trading at a 20% discount to average PE multiple, added HSBC. 

The Pepsico bottler logged a 33.45% rise in net profit for the March 2025 quarter. Net profit climbed to Rs 731.30 crore in Q1 against Rs 131.9 crore in the March 2024 quarter. Revenue from operations in Q1 rose 29% to Rs 5680 crore against Rs 4397.98 crore in the corresponding period of the previous fiscal EBITDA rose 27.8% in Q1 to Rs 1263.96 crore from Rs 988.76 crore in the Q1 of previous fiscal. The board also cleared a interim dividend of Rs 0.50 per share.  

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.