Varun Beverages - Journey Of Resilient Growth, Strategic Advancements: Motilal Oswal

Motilal Oswal Report

We expect Varun Beverages Ltd. to maintain its earnings momentum, aided by:

1. higher acceptance of newly launched products,

2. increased penetration in newly acquired territories in India and Africa,

3. continued expansion in capacity and distribution reach,

4. growing refrigeration in rural and semi-rural areas, and

5. a scale-up in international operations.

Factoring the strong fundamentals and potential for future growth (expect 21%/22%/28% revenue/Ebitda/profit after tax compound annual growth rate over CY23-26), we retain our Buy rating for the stock.

We value the stock at 57 times March-26E earnings per share to arrive at a target price of Rs 1,600.

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