Posted on February 27, 2025, by Niftynews
Shares of Varun Beverages ended 4.70% lower on February 26, 2025, closing at ₹476.40, compared to the previous close of ₹499.90. The decline in Varun Beverages share price has garnered attention due to several factors, including an extension of the company’s acquisition deal for SBC Beverages Ghana Ltd. from Ghana Bottling Company Ltd. The deal, initially set to conclude by February 28, 2025, has now been pushed to March 31, 2025, awaiting necessary regulatory approvals.
In the latest Varun Beverages news, this stock movement is seen as a key development for investors keeping track of the company’s performance and growth trajectory. Despite this short-term setback, the company continues to be a major player in the beverage industry.
Varun Beverages: Acquisition Extension Impacting Stock Price
The main factor influencing the Varun Beverages share price decline today is the extension of its planned acquisition deal. The deal for the acquisition of SBC Beverages Ghana Ltd. was initially scheduled to close by February 28, 2025, but it has now been extended to March 31, 2025, subject to regulatory approvals, including from PepsiCo Inc. The Varun Beverages stock saw a sharp decline in response to this news, with 2.23 lakh shares traded on the day, contributing to a turnover of ₹10.83 crore. As a result, the market capitalization of Varun Beverages dropped to ₹1.61 lakh crore.
Despite this decline, Varun Beverages has a history of strong market performance, with the stock being a multibagger in the past, rising 84% in two years. However, the stock has also fallen 21.37% over the last year, highlighting the volatility investors are currently experiencing.
Technical Analysis of Varun Beverages Share Price
Looking at the technical side of the stock, Varun Beverages shares are currently trading below the 5-day, 10-day, 20-day, 30-day, 50-day, 150-day, and 200-day moving averages, indicating a bearish trend. The stock’s relative strength index (RSI) is at 36, suggesting that the stock is not in the overbought or oversold zones at present. This neutral RSI indicates that Varun Beverages stock may have room for either recovery or further decline, depending on market conditions and the company’s performance in the coming weeks.
The stock’s beta of 0.8 indicates relatively low volatility, suggesting that its movements tend to be less volatile compared to the broader market. As investors closely monitor the next steps of the acquisition and regulatory approval process, the Varun Beverages share price could either stabilize or face further pressure.
Future Outlook: Varun Beverages and its Acquisition Strategy
The recent extension of the acquisition deal for SBC Beverages Ghana could impact Varun Beverages stock in both the short and long term. While the news initially caused a decline, it’s important to remember that the company is expanding its footprint in international markets, which could contribute to future revenue growth. Varun Beverages is a key PepsiCo franchisee and produces a wide range of beverages, both carbonated soft drinks and non-carbonated drinks, including packaged water. The company’s diverse product portfolio and strategic acquisitions are aimed at broadening its market presence and positioning it for long-term success.
Varun Beverages Stock: Investment Strategy
For investors, the decline in Varun Beverages share price may present a short-term buying opportunity, depending on their risk appetite and investment horizon. While the technical indicators suggest a bearish outlook in the near term, the fundamentals of Varun Beverages remain strong, and the company’s strategic expansion into new markets could drive growth in the coming years.
Given the ongoing developments, investors should keep an eye on the completion of the SBC Beverages Ghana acquisition and other strategic moves by the company. The stock’s long-term potential remains intact, but short-term volatility is expected.
Conclusion: Should You Buy or Sell Varun Beverages Stock?
In conclusion, Varun Beverages share price has faced some downward pressure today, primarily due to the delayed acquisition deal. However, the company’s strong market position, PepsiCo franchise, and growth strategy suggest that the stock may be worth considering for long-term investors. Policymakers and investors will be watching closely as the company works through the regulatory approval process for the acquisition of SBC Beverages Ghana Ltd.
If you are a short-term investor, it may be wise to wait until more clarity emerges on the acquisition’s status. On the other hand, long-term investors might view this dip as a potential opportunity to buy into a company with solid growth prospects and a broad portfolio of popular beverages.
Stay updated with Varun Beverages news to track the latest developments that could influence the stock’s movement.
