Varun Beverages Share Price Surges Over 4% As Goldman Sachs Raises Target Price Post Q2 Results

Shares of Varun Beverages Ltd. rose over 4% on Wednesday as Goldman Sachs maintained positive view with a raised target price. Analysts believe the company has a strong potential for good growth.

Goldman Sachs raised the target price to Rs 610 from Rs 590. The target price implied a 19% upside from Tuesday's close. The brokerage maintained the 'buy' rating.

However, CLSA reduced the target price. CLSA maintained a 'high-conviction outperform' rating on Varun Beverages, while it reduced the target price to Rs 774 from Rs 786 apiece, which implied a 51% upside from Tuesday's closing price.

The company's net profit increased by 5.1% to Rs 1,317 crore in its June quarter compared to Rs 1,253 crore in the year-ago period. However, the revenue was down 2.5% to Rs 7,017 crore. The beverage manufacturer also declared a dividend of Rs 0.5 per share.

Shares of Varun Beverages rose as much as 4.31% to Rs 534.20 apiece. They pared gains to trade 2.41% higher at Rs 524.50 apiece. This compares to a 0.01% decline in the NSE Nifty 50.

The stock has fallen 16.40 % in the last 12 months and 17.35% year-to-date. Total traded volume so far in the day stood at 8.68 times its 30-day average. The relative strength index was at 64.16.

Out of 29 analysts tracking the company, 27 maintain a 'buy' rating and two recommend a 'hold', according to Bloomberg data. The average of 12-month consensus price target implies a potential upside of 14.9%.