Hold Varun Beverages; target of Rs 1235: ICICI Direct

ICICI Direct's research report on Varun Beverages

Varun Beverage (VBL) is one of the largest franchisees of PepsiCo in the world. The company produces & distributes carbonated drinks, juices & packaged drinking water in six countries including India. Some of the PepsiCo brands produced by VBL include Pepsi, Diet Pepsi, Seven-Up, Mirinda, Mountain Dew, Nimbooz, String, Slice, Tropicana, Aquafina among others. The company has operations in India (except Andhra Pradesh, J&K & Ladakh), Sri Lanka, Nepal, Morocco, Zambia and Zimbabwe.

Outlook

Given most positives are already factored in valuation, we change our rating on the stock from BUY to HOLD. We value the stock at Rs 1235, valuing the business at 40x CY24 PE.