Global Brokerage Sees Upside Potential In High Quality FMCG Stock, Buy For Gain

Global brokerage Jefferies has assigned buy call to high quality large cap stock, Varun Beverages Ltd showing upside potential. Jefferies has assigned a target price of Rs 1540, implying an upside of 28%. The large cap stock gained over 6% intraday. It has a market capitalisation of Rs 78,400.64 crore. Check key details below:

1. Varun Beverages Stock Performance

The last trading price of the stock is Rs 1207.00 apiece with an intraday gain of 6.36%. Its 52-week high is quoted at Rs 1,432.05 apiece and 52-week low is quoted at Rs 557.51 apiece, respectively.

2. Varun Beverages Return

The FMCG stock declined 7% in last 1-week, 13% in last 1-month, and rallied 18% in last 3-months. It has given a return of 95% in last 1-year, 264% return in last 3-years, and 532% return in last 5-years.

3. Jefferies Viewpoint

According to the brokerage, "Soft drink is a large market in India, yet characterised by low per-capita consumption vis-à-vis developed and developing markets. VBL management expects the strong industry growth momentum to continue, with double-digit volume growth guidance in the medium term. We build in 11-12% India volume growth over CY23-24E, among the highest growth in our coverage."

Jefferies expects Varun Beverages to enjoy industry-leading growth in revenues as well as earnings. The RoCE is likely to expand to 30% this year, added the analyst.

4. About Varun Beverages

Varun Beverages Ltd part of the RJ Corp group a diversified business conglomerate with interests in beverages quick-service restaurants dairy and healthcare.

It is the second largest franchisee in the world (outside US) of carbonated soft drinks ('CSDs') and non-carbonated beverages ('NCBs') sold under trademarks owned by PepsiCo.

It produces and distributes a wide range of CSDs as well as a large selection of NCBs including packaged drinking water.

Disclaimer

The stock has been picked from the brokerage report of Jefferies. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.