Motilal Oswal's research report on Varun Beverages
Varun Beverages (VBL) reported a revenue growth of 13% YoY in 2QCY23, led by growth in volumes (up 4.7% YoY) and higher realization (up 8.2% YoY to INR179/case). Sales volume growth in India was adversely impacted by abnormally high unseasonal rains throughout the quarter. Softening of PET chips prices led to a 200bp YoY improvement in gross margins. Gross margin/unit case grew 12% YoY to INR93.8, while EBITDA/unit case improved 15% YoY to INR48.12, supported by favorable operating leverage.
Outlook
We maintain our CY23/CY24/CY25 estimates and reiterate our BUY rating on the stock with a TP of INR940.
For all recommendations report, click here
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