The company is scaling high-margin brands like Sting, alongside increased focus on value-added dairy, sports drinks and juices
Varun Beverages, a key player in the global beverage segment, is poised to maintain its strong growth trajectory. A report has stated that VBL has laid a solid foundation for future growth through timely capacity additions.
Four new greenfield plants, Prayagraj, Damtal, Buxar, and Mendipathar, have been commissioned to enhance capacity and logistics efficiency in high-growth, under-penetrated regions. Brownfield expansions are also underway across six key locations. Further, its snacks facility in Morocco has reached full-scale operations, while the upcoming Zimbabwe plant is advancing towards commissioning, underscoring the company’s steady progress in diversifying its portfolio beyond beverages, Axis Direct said in a report.
The report noted that the company is scaling high-margin brands like Sting, alongside increased focus on value-added dairy, sports drinks and juices. It is also deepening rural distribution to widen market reach.
These strategic initiatives are set to support sustained revenue and margin expansion. The report pointed out that revenue is expected to grow at 23 per cent compounded annual growth rate (CAGR) over CY24 to 27. Similarly, the earnings before interest, tax, depreciation and amortisation (Ebitda) is likely to grow at 22 per cent, while net profit (profit after tax) is projected to grow at 29 per cent CAGR during the same period.
“We recommend a buy on the stock with a target price of Rs 550 per share, implying an upside of 17 per cent from the current market price (CMP),” Axis Direct noted in its report. VBL plans to pilot Carlsberg in Southern Africa under an exclusive distribution tie-up, leveraging its existing infrastructure and favourable regulations. The low-capex, test-and-learn approach supports portfolio diversification and strengthens presence in key growth markets, it said.
