Motilal Oswal's research report on Varun Beverages
Varun Beverages (VBL) reported a revenue growth of 22% YoY in 3QCY23, led by strong volume growth (up 15.4% YoY) and high realization (up 5.6% YoY to INR176/case) in both India and international regions. PET chip prices softened for another quarter, resulting in a 160bp YoY gain in gross margins. Gross margin/EBITDA per unit case each grew by 9% YoY to INR97.8/INR40.1, supported by lower raw material prices.
Outlook
We maintain our CY23/CY24/CY25 estimates and reiterate our BUY rating on the stock with a TP of INR1,090.
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