Buy Varun Beverages, target price Rs 1073: HDFC Securities

HDFC Securities Ltd. Buy Buy with a target price of Rs.1073. Varun Beverages Ltd. , The current market price of Rs.898.45 is Rs.

The time period for which the price can reach its stated target is six months.

Varun Beverages Ltd., incorporated in the year 1995, is a Large Cap company (having a market cap of Rs 38944.83 Crore) operating in FMCG sector.

The major products/revenue segments of Varun Beverages Limited include Beverages, Other Operating Revenue, Other Services for the year ended 31-Dec-2020.

financial situation

For the quarter ended 30-09-2021, the Company reported Consolidated Total Income of Rs.2477.37 crores, down -1.20% from last quarter’s total income of Rs.2507.45 crores and up 37.17% over the corresponding quarter of last year at Rs 1806.11 crores total income of Company has reported Net Profit After Tax of Rs 257.90 Crore in latest quarter.

investment logic
Improving financial strength coupled with strong growth prospects (low per capita consumption, favorable demographics, increasing penetration with increasing electrification), solid business model with well-established brand portfolio, makes VBL an attractive investment bet. Investors can buy the stock in Rs 908-916 band (29x CY23E EPS) and add more on downside in Rs 817-823 band (26x CY23E EPS). At LTP of Rs 912, it is ~31x CY23E EPS.

Promoter/FII Holdings
Promoters held 64.89 per cent stake in the company as of 30-September-2021, while FIIs held 21.72 per cent, DIIs held 6.78 per cent.

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