Varun Beverages Share Price Surges 4% as Goldman Sachs Raises Target Price Post Q2 Results

Shares of Varun Beverages Ltd. rose significantly on Wednesday, driven by Goldman Sachs’ positive view and raised target price. The stock surged over 4% to Rs 524.50 apiece, outperforming the broader market.

Goldman Sachs Raises Target Price

Goldman Sachs maintained its ‘buy’ rating on Varun Beverages and raised its target price to Rs 610 from Rs 590, implying a 19% upside from Tuesday’s close. The brokerage’s decision was based on the company’s strong potential for growth, driven by its expanding product portfolio and increasing market share.

CLSA Reduces Target Price

However, CLSA reduced its target price to Rs 774 from Rs 786 apiece, which implied a 51% upside from Tuesday’s closing price. The brokerage maintained its ‘high-conviction outperform’ rating on Varun Beverages, citing the company’s strong financial performance and growth prospects.

Q2 Results

Varun Beverages reported a 5.1% increase in its net profit to Rs 1,317 crore in its June quarter, compared to Rs 1,253 crore in the year-ago period. However, the company’s revenue was down 2.5% to Rs 7,017 crore. The beverage manufacturer also declared a dividend of Rs 0.5 per share.

Stock Performance

Shares of Varun Beverages rose as much as 4.31% to Rs 534.20 apiece, paring gains to trade 2.41% higher at Rs 524.50 apiece. This compares to a 0.01% decline in the NSE Nifty 50.

Analyst Estimates

Out of 29 analysts tracking the company, 27 maintain a ‘buy’ rating and two recommend a ‘hold’, according to Bloomberg data. The average of 12-month consensus price target implies a potential upside of 14.9%.

Trading Volumes

Total traded volume so far in the day stood at 8.68 times its 30-day average. The relative strength index was at 64.16.

Conclusion

Varun Beverages’ share price surged 4% on Wednesday, driven by Goldman Sachs’ positive view and raised target price. The company’s strong financial performance and growth prospects have boosted investor confidence, leading to a significant increase in its share price. However, analysts have mixed views on the stock, with some maintaining a ‘buy’ rating and others recommending a ‘hold’. Investors should closely monitor the stock’s performance and Q2 results to make informed investment decisions.