BevCo's acquisition to aid Varun Beverages' market share, EPS: Analysts

Shares of Varun Beverages hit a new peak of Rs 1,380.45 as they surged 18 per cent in Wednesday's intraday trade. With an m-cap of Rs 1.63 trillion, VBL stands at 40th position in m-cap ranking

Varun Beverages’ (VBL) complete acquisition of South Africa-based the Beverage Company (BevCo) is set to boost its market share, besides spurring earnings per share (EPS) over the next few years, according to analysts.

Raising the company’s target price to Rs 1,250 (from Rs 1,025), analysts at Kotak Institutional Equities said the acquisition will lead to a significant value creation opportunity for VBL. It will give a fillip to PepsiCo’s low single-digit share in South Africa.

“South Africa is the largest soft drinks market in Africa, with an industry size of nearly 1.18 billion cases (about 50 per cent of India).