Varun Beverages shares rally over 5% as stock trade ex-date after 2:5 stock split; check details

Varun Beverages shares rallied more than 5% on Thursday, September 12, as the stock turned ex-split.

The company, which is the second-largest franchisee of PepsiCo, had fixed September 12 as the record date for the stock split from the face value of ₹5 each into shares with a face value of ₹2 each.

Every two Varun Beverage Ltd shares of a face value of ₹5 each held by investors turned into five shares of face value of ₹2 each on the record date, as per the proposal approved by shareholders earlier.

After the stock split, Varun Beverage shares opened at ₹635 per share on the NSE and rallied further to hit a high of ₹665 per share. At 11:15 a.m., the stock was trading 4.81% higher at ₹657 on the NSE. More than 5 lakh shares of the company changed hands on the bourse.

Varun Beverages accounts for around 90% of PepsiCo’s sales in the country. It is also the exclusive bottler of PepsiCo in Sri Lanka, Nepal, Zambia, Zimbabwe and Morocco.

Experts have opined that the bottler is expected to continue its growth momentum following the acquisition of Beverage Company, which will help it consolidate its presence in South Africa and DRC.

Experts have also noted the company’s continued focus on expansion in distribution reach and commissioning of multiple facilities across geographies, saving significant transportation costs.

Experts stated that these investments are likely to support VBL’s long-term growth objectives and profitability.

Varun Beverage reported a 28.3% jump in revenue from operations to ₹7196.86 crore in the April-June quarter of 2024 compared to ₹5611.4 crore during the same period a year ago.

Consolidated sales volume grew by 28.1% to 401.6 million cases in April-June 2024 from 313.5 million cases in April-June 2023. This includes 28 million cases from BevCo during the quarter.

India volumes grew by 22.9%, while International volumes (before BevCo volumes) were almost flat, primarily because volumes in Zimbabwe were affected by the portfolio transition to zero sugar without affecting profits.