Varun Beverages shares rise 10% in 2 days post Q2 results; upside left?

Most analysts have maintained their ratings on Varun Beverages' stock, while slightly increasing their share price target post Q2-2025 results. Check the latest targets and upside potential

Varun Beverages share price: Despite an earnings-beat in the June quarter results, analysts remain cautiously optimistic on Varun Beverages share outlook. The caution, they said, creeps from the Pepsi distributors’ volume hit in Q2-CY25, coupled with intensifying competition in the industry.

 

As a result, most analysts have maintained their rating, while slightly increasing their share price target on Varun Beverages. They have, however, trimmed their earnings estimates.

 

On the bourses, Varun Beverages share price has soared 9.7 per cent in two days as against a per cent rise in the benchmark BSE Sensex index.  READ STOCK MARKET UPDATES TODAY LIVE

Varun Beverages Q2 results highlights:

During the June quarter of FY26, Varun Beverages reported a consolidated revenue of ₹7,020 crore, down 2.5 per cent year-on-year (Y-o-Y), with Ebitda (earnings before interest, tax, depreciation, and amortisation) staying flat (up 0.4 per cent Y-o-Y). The company’s net profit, meanwhile, logged a growth of 5.1 per cent to ₹1,320 crore.

 

Unseasonal rains, however, dented the company’s volumes during the quarter. Consolidated volumes slipped 3 per cent on year, dragged by India volumes (down 7.1 per cent) even as international volumes grew 15.1 per cent.

 

The management, however, remains cautiously optimistic on India volumes going ahead, closely monitoring monsoon intensity and festive season’s demand trends for recovery.

 

That said, Varun Beverages’ managed to expands its Ebitda margin by 80 basis points Y-o-Y, led by operating efficiencies and healthy growth in the international markets (volume growth, positive currency movement in Africa territories; and increased operational efficiencies).  ALSO READ | NTPC shares gain 2% following Q1 earnings; time to buy, sell or hold?

Varun Beverages Joint Venture 

 

In a separate development, the management informed the shareholders that the company has formed and incorporated a Joint Venture entity in India - White Peak Refrigeration Private Limited. This JV will be incorporated between Varun Beverages Ltd and Everest Industrial Lanka (Private) Limited (wherein 50 per cent stake will be held by VBL) to jointly manufacture visi-coolers and other refrigeration equipments. 

Varun Beverages dividend news

During its Board meeting, the management of Varun Beverages also approved the payment of the second interim dividend of ₹0.50 per equity share for the financial year 2025. The Board has fixed August 2, 2025 as the 'Record Date' for the purpose of determining entitlement of equity shareholders.  ALSO READ | Blue Dart Express shares slip 3% on posting 9% decline is Q1 PAT

Varun Beverages stock outlook

JM Financial Institutional Securities

Varun Beverages’ Q2CY25 earnings print was ahead of estimate as weakness in the domestic volumes was offset by strong delivery on margins. Stable gross margins and superior execution on extracting cost efficiencies in India business, and better realisation/case and margin expansion in the international business were the key positive surprises.

 

Superior execution, large opportunity size (in Africa), and net debt free status, according to the brokerage, provide confidence on the earnings growth (CAGR of 16.4 per cent over CY24-26).

 

“Factoring volume miss, we have cut earnings by 3-4 per cent. We roll forward and maintain ‘Buy’ rating with a revised target price of ₹595 (from ₹570),” it said.

ICICI Securities

Despite temporary weather-led disruption in India, management remains confident of a demand recovery in H2, backed by capacity rollout, wider product availability, and increasing penetration across retail.

 

The company has added four new production facilities in Prayagraj, Buxar, Damtal, and Mendipathar, along with a new snacks plant in Morocco and a can line in South Africa. While the capex for H1 stood at around ₹2,500 crore, the intensity is expected to reduce in India going ahead.

 

“We cut our estimates by 5-6 per cent for CY25-26 and model revenue, Ebitda, and net profit CAGR of 15 per cent, 14 per cent, and 21 per cent, respectively, over CY24-27. We maintain ‘Hold’ with a revised share price target of ₹500 (from ₹470),” the brokerage said.

 

It values the stock at a price-to-earnings (P/E) of 48x and 40x based on CY26 and CY27 earnings estimates.

Motilal Oswal Financial Services

The brokerage believes VBL delivered a stable performance despite the challenges posed by unseasonal rains during the quarter. It expects the beverage and snacks distributor to maintain its earnings momentum ahead aided by a scale-up in the international market, strengthening on-ground execution, enhanced product visibility with an increase in the number of visi coolers, and an expanding product portfolio.

 

“We largely maintain our CY25/CY26 earnings estimates and expect a CAGR of 15 per cent, 14 per cent, and 19 per cent in revenue, Ebitda, and net profit over CY25-27. We value the stock at 54x CY26E EPS to arrive at a target of ₹620,” MOFSL said with a ‘Buy’ rating.

Emkay Global Financial Services

Emkay Global opines that the company’s decision to go slow on organic capex intensity, with current utilisation standing at 70 per cent, provides ample scope to support near-term growth. Add to this, VBL is actively scouting for potential inorganic acquisitions too, which supports growth outlook.

 

“We largely maintain our CY26/27 estimates, as better margin trends on structural initiatives completely offset a slight correction in our topline estimates due to the prolonged rains. Despite the rising competition, Varun Beverages remains upbeat about the India growth opportunity, with sharp focus on improving its GTM and distribution expansion with VC placements,” it said.

 

Emkay Global held its ‘Buy’ rating and a share price target of ₹575.

Nuvama Institutional Equities

Varun Beverages has multiple levers to drive its 10-per cent organic volume growth target aided by the addition of Visi Coolers to existing outlets and distribution reach. It intends to add 0.1 million outlets per annum.

 

Besides, scale-up of recently acquired south and west territories and evolved product mix (in-sync with shift in consumer preferences) are visible in its recent product launches. The company, Nuvama said, has an extensive beverage portfolio among all major companies, helping it capture upcoming trends.

 

The brokerage maintains its ‘Buy’ rating but has cut its target to ₹606 from ₹659.