Varun Beverages: Good recovery, better margin outlook augur well for stock

Though out-of-home consumption is still under pressure due to the coronavirus pandemic, rising in-house consumption of carbonated soft drinks (CSD) is partly reducing the pressure on overall volumes

Even as Varun Beverages posted a 69 per cent year-on-year (YoY) fall in pre-tax profit to Rs 181.9 crore in the June 2020 quarter (Q2), led by a 46.4 per cent contraction in volumes, its share price has gained over 8 per cent since the announcement of results, versus a 2.4 per cent rise in the Nifty FMCG index.

PepsiCo’s India franchise, which follows the January-December accounting period, announced its quarterly results on Tuesday. 

Good business recovery and improved margin outlook have boosted investor sentiment towards the stock.