Buy Varun Beverages; target of Rs 1330: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on Varun Beverages

Varun Beverages (VBL) posted robust revenue growth in 3QCY22, fueled by strong volume growth (up 24% YoY) and higher realization (up 7% YoY). Gross margin improved 90bp YoY despite the inflationary raw material environment aided by higher realization. EBITDA/unit case improved 14% YoY to INR36.8 supported by operating leverage. Factoring in a better-than-expected volume and realization growth in 3QCY22, we raise our CY22E/CY23E/CY24E earnings by 6%/7%/8%, respectively.

Outlook

We expect a revenue/EBITDA/PAT CAGR of 23%/28%/45% over CY21-24, respectively. We value the stock at 41x CY24E EPS to arrive at our TP of INR1,330. Maintain BUY.

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Varun Beverages - 02-11-2022 - moti