Varun Beverages shares advance over 3%; stock gains 11% in one month

The stock has rallied 11% in the past 30 days.

Recently, global investment banking and capital markets firm Jefferies said that the stock is currently trading at 45 times the one-year forward P/E ratio, which is below its five-year average and close to some of the FMCG peers despite a better growth profile.

Equity research firm CLSA, in a report, said that Varun Beverages' valuations have corrected, with its one-year forward P/E ratio correcting from 63 times to 48 times. CLSA noted that investors’ concerns are overdone and that the stock is trading below its average multiple.

Varun Beverages December quarter numbers

Revenue from operations increased 39.78% to ₹3,817.61 crore in the latest December quarter of the calendar year 2024 (CY24), compared to ₹2,730.98 crore a year back.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose 39% to ₹580 crore in the quarter under review, compared to ₹418 crore in the corresponding period last fiscal. EBITDA margin remained flat at 15.7%.

The company's board also announced a dividend of ₹0.50, subject to the approval of shareholders in the ensuing annual general meeting of the company.

Commenting on financial results, Ravi Jaipuria, Chairman of Varun Beverages, said, "We are pleased to conclude CY2024 on a strong note by adding geographical presence into new territories of South Africa along with distribution rights in Namibia, Botswana, Mozambique, and Madagascar. We also started greenfield operations in a new country, the Democratic Republic of Congo (DRC). The growth has been driven by organic volume growth and improved product mix."