Varun Beverages was able to perform well, especially in terms of volumes in the third quarter for the calendar year 2026 despite an inflationary environment. Consequently, brokerages remain largely bullish on the company, with most retaining their 'buy' ratings.
Goldman Sachs On Varun Beverages
GS has maintained a 'buy' rating on the pepsi-bottler with a price target of Rs 520 as it noted that revenue and Ebitda beat estimates, led by strong volume growth.
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The brokerage said that India volumes accelerated on favourable weather and a strong summer and India realisations turned positive, indicating easing competitive intensity.
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Gross margin fell on packaging and sugar inflation, but operating leverage partly offset gross-margin pressure, according to GS.
The brokerage expects price hikes to be considered if input costs remain elevated.
Separately, it added that International growth remained strong as Twizza capacities ramped up and supply chain efficiencies supported international margins despite input-cost pressure.
Jefferies On Varun Beverages
Jefferies, on the other hand, has reduced Varun Beverage's price target to Rs 530 from Rs 615, with retaining a 'buy' call on the company.
The brokerage noted that India volume growth rebounded, aided by favourable weather and a low base, Growth momentum continued in October; competition remained manageable.
Margins missed estimates due to packaging-cost inflation, but positive India realisations partly offset raw-material pressure.
Jefferies said lower grammage in Sting helped mitigate inflation without price hikes. In the overseas market new initiatives scaled well, with Kenya operations and new product launches and distribution expansion and technology-led optimisation remain key growth drivers.
HSBC On Varun Beverages
HSBC noted that VBL delivered another quarter of strong volume growth and resilient earnings despite supply chain disruptions and cost pressures.
It maintained a 'buy' rating on the company with a price target of Rs 540, citing strong execution capabilities, expanding digital ecosystem, and growing international presence.
With over 0.5 million retailers on its B2B platform, the brokerage believes enhanced digital capabilities will enable more granular point-of-sale execution and support faster revenue growth.
Moreover, HSBC believes the stock trades at a 25% discount to its historical valuation, offering an attractive entry point supported by resilient fundamentals and steady growth.
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