Shares of Varun Beverages Ltd. hit a 52-week high intraday before erasing all gains to close with losses even as analysts bet on the company's new launches, distribution expansion and volume growth after the first quarter of this fiscal.
Here's what analysts have to say about Varun Beverages' Q1 results:
Emkay
Reiterates 'buy' with a target price at Rs 1,060, an implied return of 14.02%.
Sustained momentum strengthens confidence in the company's execution capabilities.
Strong traction in new products like Sting, juices and dairy, traction in core portfolio, distribution expansion aided India growth.
The company expects double-digit volume growth to continue.
Expects normalisation of raw material costs and operating leverage to aid Ebitda margin gains.
Jefferies
Maintains 'buy' with a target price of Rs 1,050, an implied upside of 13.38%.
Raises CY22-24EPS by 5-17%.
The company remains confident of posting double-digit volume growth in the upcoming quarters.
There is a long growth runaway for energy drinks segment with Sting energy drink growing 185% YoY.
Motilal Oswal
Reiterates 'buy' with a target price of Rs 1,110, an implied return of 19.31%.
Robust volume growth and higher realisation aided revenue growth.
Raises CY22/23/24 earnings estimate by 7%/10%/10% to factor in a better-than-expected volume and realisation growth.
Expansion of distribution network, strong demand aid volumes while margins contracted due to RM costs.
Sees robust growth in underpenetrated markets in Madhya Pradesh, Odisha, Bihar, Jharkhand, Chhattisgarh as a huge positive.
Expects firm to maintain earnings momentum aided by increased penetration in South, West India, new launches and refrigeration.
Expects revenue/Ebitda/PAT CAGR of 20%/24%/37% over CY21-24.
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