Varun Beverages Q4 Results Review - Strong Volume Growth Drives Sales: Motilal Oswal

Motilal Oswal Report

Varun Beverages Ltd. reported a revenue growth of 21% YoY in Q4 CY23, led by strong volume growth (up 18% YoY) and high realisation (up 2% YoY to Rs 171/case).

While we maintain our CY24 earnings, we increase our CY25 earnings estimate by 7%, integrating the recently acquired South African beverage company BevCo’s financials and also increasing volume growth estimate of the existing business to 16%/14% for CY24/25 from 14%/13% earlier estimated.

However, higher interest cost, led by increase in debt (capex and acquisition-led increase) partly offsets the increase in earnings.

We reiterate our 'Buy' rating on the stock with a target price of Rs 1,500.

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