Volume recovery to support Varun Beverages, stock outperforms

Bunching up of festive season in Q4CY20, resumption of public transport aiding on-the-go consumption, continuing in-home consumption trend bode well for the firm going forward

Shares of Varun Beverages (VBL), which bottles and distributes PepsiCo’s range of beverages in India had rallied close to 19 per cent to hit an all-time intraday high of Rs 924 on Friday. Though it gave up some of the gains on Monday’s session, analysts forecast robust growth in the quarters ahead backed by increased volumes.  

The company reported better-than-expected volumes in the last quarter, aided in part by the opening of hotels and restaurants from September. While volumes were down 4 per cent during Q2, the management highlighted that they were 13 per cent higher in the month of