Motilal Oswal's research report on Varun Beverages
Varun Beverages (VBL) reported a revenue growth of 11% YoY in 1QCY24, led by volume growth (up 7% YoY) and high realization (up 4% YoY to INR180/case).EBITDA margins expanded 240bp YoY, led by improved gross margins (up 390bp YoY). This improvement can be attributed to decreased PET prices, the company’s concentrated efforts to minimize sugar content, and the adoption of lighter packaging materials.
Outlook
We largely maintain our CY24/CY25/CY26 earnings. We reiterate our BUY rating on the stock with a TP of INR1,720.
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