Motilal Oswal's research report on Varun Beverages
VBL posted strong revenue growth in 2QCY22, led by robust volume growth (up 97% YoY) and higher realization (up 3%). EBIDTA/unit case improved by 11% YoY to INR41.7 on the back of operating leverage and higher realizations, despite inflationary raw material environment impacting gross margin. Factoring a better than expected volume and realization growth in 2QCY22, we raise our CY22/CY23/CY24 earnings estimate by 7%/10%/10%.
We expect a revenue/EBITDA/PAT CAGR of 20%/24%/37% over CY21-24. We value the stock at 40x CY24E EPS to arrive at our TP of INR1,110. We maintain our Buy rating.
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