Posted on March 4, 2025, by Niftynews
Varun Beverages share price has gained 8% in the last two trading sessions, with analysts predicting further growth toward ₹500. The stock opened at ₹456.15 on the Bombay Stock Exchange (BSE) and quickly touched an intraday high of ₹471.75. Analysts attribute this surge to a series of positive developments, including a recent upgrade by CLSA, which has significantly boosted investor sentiment.
CLSA Upgrades Varun Beverages Share Price to ‘High Conviction Outperform’
Hong Kong-based brokerage CLSA has raised its rating for Varun Beverages share price to ‘high conviction outperform,’ an upgrade from the previous ‘outperform’ rating. The move comes despite increasing competition in the beverage industry, with CLSA emphasizing that the stock’s risk-reward ratio remains highly attractive. Although the brokerage slightly reduced its target price from ₹802 to ₹770, it still sees significant potential for the company’s growth, with the stock expected to rise by nearly 70% from current levels.
CLSA’s analysts note that Varun Beverages share price has faced some headwinds, including a predicted 5% EBITDA decline for the fiscal year 2025. Additionally, the company’s capital expenditure (Capex) reached a peak in 2023. However, analysts anticipate a reduction in Capex intensity going forward, which is expected to improve margins and drive profitability in the future.
Positive Technical Indicators for Varun Beverages Share Price
Riyank Arora, Technical Analyst at Mehta Equities, has also expressed optimism about Varun Beverages share price. According to Arora, the stock has recently broken through its immediate resistance level of ₹460, indicating that it could see further upward movement. With rising volumes and positive sentiment surrounding the FMCG and consumer sector, Varun Beverages share price is poised to extend its gains toward ₹500 and beyond. Arora advises traders to set a stop-loss order at ₹440 to manage downside risk.
Varun Beverages Share Price Supported by Strong Q3 Results
Varun Beverages share price has also benefited from the company’s strong financial performance for the December quarter of 2024. The company reported a 36% year-on-year increase in consolidated net profit, reaching ₹195.64 crore, up from ₹143.76 crore during the same period last year. This growth was primarily driven by higher volumes and improved margins, which further solidify the company’s position in the competitive beverage market.
Revenue from operations for the fourth quarter surged to ₹3,817.61 crore, compared to ₹2,730.98 crore in the same quarter of the previous year. The company’s EBITDA grew by 38.7% to ₹579.97 crore, underlining its ability to efficiently manage costs and maintain healthy profit margins.
Varun Beverages Share Price Reflects Growing FMCG Sector Outlook
Looking ahead, Varun Beverages share price is well-positioned to capitalize on growing demand in India’s FMCG sector. The company continues to expand its product portfolio and market presence, with a focus on increasing sales across its regional markets. Analysts expect that demand for its products, particularly soft drinks, will remain strong in the coming quarters, supported by consumer preferences and an expanding middle class.
Despite challenges posed by rising competition, Varun Beverages share price has demonstrated resilience and the ability to maintain growth. Its strategic focus on innovation, market penetration, and improving operational efficiency has contributed to the positive sentiment surrounding the stock.
In the near term, the company’s performance is expected to remain strong, with Varun Beverages share price continuing to benefit from favorable market trends. However, investors should be mindful of potential risks, including increased competition and economic uncertainties.
Conclusion: Strong Upside Potential for Varun Beverages Share Price
Overall, Varun Beverages share price has shown significant growth potential, bolstered by an upgrade from CLSA and strong quarterly results. With a target price of ₹770 and a potential upside of 70%, the stock is attracting considerable attention from investors. Technical indicators also suggest that the stock may continue its upward momentum, with key support levels at ₹440 and resistance at ₹500.
As investors look to capitalize on the stock’s potential, Varun Beverages share price appears poised for further gains in the near future, making it an attractive option for those looking for opportunities in the FMCG sector.
