Varun Beverages shares under bear attack, oversold on charts; what lies ahead?

Shares of Varun Beverages are stuck in bear grip for a period up to two years. After closing in the red for the first time in  nine years in 2025, the stock has not shown any signs of recovery this year. The multibagger stock, which slipped 23.14% last year, has turned oversold on charts with a RSI of 28.7. This signals there are more sellers than buyers for the stock in the current session. Varun Beverages stock is in a short term and long-term downtrend with the FMCG share trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 150 day and 200 day moving averages.

Weakness in VBL stock   

Analysts have attributed the weakness in the Varun Beverages stock to rising competition in the fast-moving consumer goods (FMCG) especially and beverage space, the potential initial public offering (IPO) of Coca-Cola Beverages India business  and high operating costs. 

VBL Price Targets  

However, brokerage Motilal Oswal is enthused after the firm's Q4 earnings. 

It expects sales volume growth to be in double digits for calender, while margins are expected to be sustained at the current levels of 22-23%. 

According to the brokerage, the international market is likely to grow at a healthy pace with rising capacity, backward integration, and increasing retail touchpoints. It expects a CAGR of 14%/14%/18% in revenue/EBITDA/PAT over CY25-27.

"We broadly maintain our CY26/CY27 earnings estimates and reiterate our BUY rating on the stock with a target price of Rs 570 (premised on 45x CY27E EPS)," said the brokerage. 

"CY25 has been a challenging year for VBL, despite capacity additions, due to weather-related demand disruptions. However, going forward, we expect VBL to improve its earnings momentum, aided by: 1) a scale-up in the international market (mainly in South Africa), 2) scale-up of the snacking business from CY26, backed by the operationalisation of Morocco and Zimbabwe, and 3) an expanding product portfolio," added Motilal Oswal. 

Brokerage Asit C Mehta has a assigned a price target of Rs 605 on the VBL stock. 

"This year, VBL has shown some resilience in domestic business, amid challenging weather patterns, and is likely to see return of double-digit growth on an annual basis as weather conditions improve. This growth and largely steady margins are despite the impact of increased competitive intensity. On the international front, growth is expected to see an uptick due to strong performance in South Africa and improvement in Zimbabwe and DRC," said Asit C Mehta 

The brokerage remains constructive on the FMCG stock due to this focus on international expansion resilience in domestic and strong execution capabilities of the company. 

It has moderated its Adjusted EPS estimates for CY26/27E by 2.7/0.8%, respectively. 

"We retain our valuation multiple of 52x to CY27E EPS of Rs 11.6," added Asit C Mehta 

VBL Stock Movement  

In the current session, Varun Beverages stock ended 4.03% higher at Rs 456.70 against the previous close of Rs 439. A total of 3.40 lakh shares of the firm changed hands, amounting to a turnover of  Rs 15.38 crore. Market cap of the firm stood at Rs 1.54 lakh crore. 

About Varun Beverages

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.