Varun Beverages shares shed multibagger tag; time to buy, sell or hold?

Shares of Varun Beverages have lost fizz, largely shedding their multibagger tag in the long term. The FMCG stock, clocked gains of 316% in two years and rose 603.38% in three years, according to data in the middle of May last year. The stock is just up 17% in two years and risen 90% in three years, show market data today. An exception to the trend is investors should have entered the Varun Beverages counter five years ago to fetch returns of 638.63. 

The PepsiCo bottler with diminished returns in the long term has turned negative in the short term. In fact, the stock has been falling across time durations up to a year. 

The stock is down 33.36% this year and fallen 20% in a year, reflecting short-term correction in the stock. 

In the current session, Varun Beverages became oversold on charts. The relative strength index (RSI) of Varun Beverages fell below the 30 mark at 29.1. Varun Beverages shares are trading lower than the 5 day, 10 day, 20 day 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

The stock was trading on a flat note at Rs 432.70 on BSE. Market cap of the firm fell to Rs 1.46 lakh crore. A total of 0.21 lakh shares of the firm changed hands amounting to a turnover of Rs 90.89 lakh. 

Ameya Ranadive, Chartered Market Technician, CFTe, Sr Technical Analyst, StoxBox said, Varun Beverages continues to display signs of weakness, slipping steadily over the past few months. The stock has recently given a breakdown below Rs 448 on the daily chart and now trades around Rs 440. The structure indicates sustained selling pressure, with a short-term view remaining bearish. Traders may consider short positions with a stop-loss at Rs 450 and targets placed near Rs 410. Technical indicators support the negative sentiment. The RSI has dropped below 30, indicating oversold territory but showing no reversal signs yet. The ADX reading around 45 signals a strong trend, while the –DI remains above the +DI, reaffirming bearish control. The MACD histogram is deep in negative territory, highlighting continued downward momentum. Unless the stock closes back above Rs 450 with volume confirmation, recovery attempts may remain capped. Sustained weakness below Rs 440 could accelerate selling toward Rs 410." 

Kunal Kamble, Sr. Technical Research Analyst at Bonanza Portfolio said, "Varun Beverages has given a breakdown from a Symmetrical Triangle pattern on the daily timeframe, indicating a negative trend. The price trading below its 50 DEMA further confirms bearish sentiment in the stock. However, the decline in volume during the fall suggests that the downtrend lacks strength. On the momentum front, the RSI is in the oversold zone, which acts as a caution signal for bears, indicating that the downside momentum may be losing steam. Although the stock has broken down, the absence of volume confirmation implies that the move is weak, and a short-term pullback cannot be ruled out.  On the downside, the stock is likely to find strong support near the Rs 420 level, where the next key support zone lies."

Om Mehra, Technical Research Analyst, SAMCO Securities said, "Varun Beverages continues to exhibit weakness, extending its lower-high, lower-low formation on the daily chart. The recent breakdown below Rs 450, which was earlier a strong horizontal support, further validates the ongoing bearish outlook. The price is now oscillating near the lower boundary of its broad descending channel, highlighting that the stock is undergoing a deep price correction accompanied by time-based consolidation.

The MACD continues to hover in negative territory, with histogram bars maintaining their downward slope. The volumes have remained moderate in recent sessions, indicating that long liquidation may be cooling, but fresh buying interest is yet to emerge."

"The next support zone remains between Rs 418 and Rs 420, which coincides with the earlier swing low from March 2025. A breakdown below this level could open the path toward Rs 400, while any rebound attempt would face resistance near Rs 446–Rs 455, followed by Rs 470, where multiple short-term moving averages converge. At this stage, the stock should be avoided for fresh long positions until a clear reversal signal appears. Investors may wait for a rebound and close above Rs 450 to confirm a pullback," said Mehra. 

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.