Motilal Oswal's research report on Varun Beverages
VBL posted robust sales growth, supported by strong (19% YoY) volume growth across geographies and higher (6% YoY) realization. Volume growth was led by the early onset of summer in India, translating into higher demand. Despite higher input cost, operating performance improved significantly due to higher realization and operating leverage. Consequently, EBIDTA/unit-case improved by 17% YoY to INR29.5. Factoring in its 1QCY22 performance, we raise our CY22/CY23 earnings estimate by 7%/6% as the growth trajectory is expected to continue with robust demand from out-of-home consumption and strong support from newly launched products.
We maintain our Buy rating with a TP of INR1,230/share.
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