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Varun Beverages share price today: Global brokerage HSBC has reaffirmed its buy rating on Varun Beverages Ltd (VBL), citing the company’s strong distribution network, production capacity, and strategic positioning in the beverage industry. The positive outlook comes amid strategic changes in the sector, as PepsiCo considers adjustments to its franchise model under increasing pressure from activist investors.

HSBC has set a target price of Rs 640 per share, implying a potential upside of nearly 44 per cent from the current market price of Rs 439. The brokerage sees the stock as a long-term investment opportunity, driven by strong fundamentals, strategic partnerships, and market expansion.

According to HSBC, Varun Beverages is well-positioned to benefit from any franchise restructuring at PepsiCo. While third-quarter volumes remained stable, seasonal demand, rural market expansion, and the introduction of new beverage categories are expected to accelerate growth in the coming quarters.

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“PepsiCo’s potential franchise adjustments could significantly boost profitability for major bottlers like Varun Beverages,” the brokerage noted, highlighting the company’s ability to capitalize on industry trends.

Varun Beverages has been PepsiCo’s franchise partner since the 1990s and is one of its largest global bottlers. The company produces and distributes carbonated drinks, non-carbonated beverages, and packaged water in India and select international markets.

Top brands include Pepsi, 7Up, Mirinda Orange, Mountain Dew, and Tropicana Juices. Its strong rural presence ensures wide consumer reach, giving it a competitive edge in the beverage market.

Varun Beverages has a market capitalization of around Rs 1.48 lakh crore. The stock has traded between Rs 419 and Rs 664 over the past 52 weeks. Key financial metrics include:

P/E ratio: 52.2

Book value: Rs 54.3

Dividend yield: 0.23 per cent

ROCE: 24.8 per cent

ROE: 22.5 per cent

HSBC expects Varun Beverages to benefit from rural market expansion, seasonal demand, and strategic policy shifts over the next two to three quarters. The company’s robust balance sheet, high returns, and PepsiCo partnership make it a compelling option for investors seeking sustainable growth and attractive returns.

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Senior Sub-editor at Zee Business English

shweta.shukla@India.com

Shweta Birendra Shukla is a journalist covering the stock market and corporate affairs, with prior stints at Business ...LATEST NEWSBy accepting cookies, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.