Varun Beverages Q1 Review: Brokerages Stay Bullish On 'Refreshing' Quarter — Check Revised Targets

Varun Beverages Ltd (VBL) has seen renewed confidence from brokerages after a robust Q1 performance, with both Jefferies and Citi reiterating bullish calls and raising target prices. The PepsiCo bottler reported over 14% volume growth in India, a key positive at a time when competitive intensity — particularly from Campa — had been a concern. Net profit rose 20% to Rs 872 crore in Q1CY26 from Rs 726 crore in Q1CY25. Revenue rose 18% to Rs 6,574 crore from Rs 5,567 crore in the same quarter previous year.

Jefferies maintained its “Buy” rating while raising its target price to Rs 615 from Rs 550, calling it “a refreshing quarter.” The brokerage highlighted that management appears unfazed by rising competition. Citi, which also maintained a “Buy” and hiked its target price to Rs 640 from Rs 575, on strong domestic performance as a key trigger.

Margins emerged as a key positive across brokerage notes. EBITDA margins expanded meaningfully during the quarter, aided by operating leverage and improved gross margins. Beyond India, VBL's international operations delivered a broad-based performance, contributing to overall growth. Jefferies highlighted strong execution across markets, while Citi pointed to additional upside from recent acquisitions and expanding distribution.

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Both brokerages see the current quarter as pivotal, with summer demand likely to drive earnings upgrades. Citi has raised its FY26–28 EPS estimates by 7–9%, while Jefferies also increased forecasts, reflecting confidence in sustained growth momentum.

Jefferies on Varun Beverages

• Jefferies maintains a Buy rating and hikes the target price to Rs 615 from Rs 550.
• Q1 was a strong quarter, with over 14% volume growth.
• This comes despite concerns around rising competition from Campa.
• International business also delivered strong, broad-based performance.
• Management commentary remained positive on growth and margin outlook.
• The company is focusing on overall market expansion rather than competitive pressures.

Citi on Varun Beverages

• Citi maintains a Buy rating and hikes the target price to Rs 640 from Rs 575.
• Strong India performance has helped allay investor concerns.
• April volumes were robust, with further upside expected from a strong summer season and favourable base in May-June.
• Realisation decline remains limited despite pack upsizing.
• Margins are expected to benefit in the near term from operating leverage.

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