Shares of Varun Beverages rallied 11.4 per cent to Rs 701.85, also its 52-week high, on the BSE on Tuesday after foreign brokerage CLSA maintained 'Buy' rating on the stock post strong September quarter results in FY20 (Q2FY20).
"Double digit growth appears commendable in the current context, with steady progress in recently acquired South and West Territory... Management appears confident in its near-term outlook," it noted in its review. The brokerage maintains 'buy' rating with a target price of Rs 860.
The soft-drink producer and one of the largest franchisee of PepsiCo worldwide posted a 83.7 per cent YoY rise in the profit after tax (PAT) at Rs 81.12 crore on the back of robust volume growth, while revenue from operations (net of excise and Goods and Services Tax) grew by 49.2 per cent YoY to Rs 1,739.73 crore. Further, Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 54.2 per cent to Rs 325.66 crore from Rs 211.24 crore reported in the corresponding quarter of the previous fiscal.
"Total sales volumes were up 60.4 per cent year-on-year at 124.5 million unit cases in July to September as compared to 77.6 million unit cases in the same period of last year," the company said in its statement.
CLSA lauded the company's efforts to prevent any "negative surpise" on the margin front despite large acquisitions".
At 11:00 am, the stock was trading 8.73 per cent higher at Rs 684.75, as against an unchanged benchmark S&P BSE Sensex index. About 7.6 lakh shares have changed hands on the NSE and BSE till the time of writing of this report.