Varun Beverages share price rose 4.3% to an intra-day high of Rs 534.20 on the National Stock Exchange. The stock rose after reporting its quarterly results for the first quarter of the financial year 2025-26. Here’s what Nuvama Institutional Equities said in its research note.
Nuvama on Varun Beverages: EPS estimate cut
Nuvama retained its ‘Buy’ rating on Varun Beverages, with a slightly lower target price of Rs 606. While India’s base remains favourable in the second half of the calendar year 2025, the September quarter may be affected by heavy monsoon rainfall. Nuvama said given the miss in a key quarter, the brokerage is cutting CY26 EPS by 6%; however, the EPS target for CY27 remains unchanged.
Nuvama on Varun Beverages: Expansion of EBITDA margin
Varun Beverages’ EBITDA margin expanded 82 basis points YoY and 578 bps QoQ due to operational efficiency. International volumes rose 15.1% (South Africa grew 16.1%), partially offsetting the overall decline in volume.
Nuvama on Varun Beverages: First half incurred high capex
During the first half of CY25, Varun Beverages incurred a capex of Rs 2,500 crore, including Rs 1,450 crore for four greenfield plants (UP, Bihar, HP and Meghalaya), Rs 120 crore for brownfield expansion in Sricity and Rs 450 crore for international projects (DRC, Morocco, South Africa). The bottler to Pepsi Co acquired a 50% stake in Everest Industrial Lanka for backward integration in visi-coolers.
However, the company reported a fall in consolidated volume by 3% YoY and India volume declined by 7.1% YoY due to a weak summer and high base. The consolidated net realisation per case rose 0.5% led by improvement in international markets. India pricing was down 2% due to high sales of water.
Nuvama’s stock performance
The share price of Varun Beverages has risen 7% in the last five trading sessions. The stock has given a return of 14% in the past one month and has declined by 3.66% in the past six months. Varun Beverages has erased more than 17.5% in the past one year.