Amid strong growth expectations, more fizz left in Varun Beverages' stock

One year forward valuations at 40 times earnings are at a substantial discount to FMCG peers

While listed fast moving consumer goods (FMCG) companies continue to outperform the benchmarks over the past month, one stock which has gained the most among the Nifty FMCG Index constituents is Varun Beverages. The bottler for PepsiCo is up 22 per cent since August 1 as compared to the Nifty FMCG returns of 11 per cent during this period.

The company, which was one of the worst impacted due to the lockdown and lack of out of home activity, has reported a good recovery (up 40 per cent y-o-y) in the first half of CY21. Going ahead, it is expected