Varun Beverages shares are in focus on Tuesday, February 11, after analysts retained their ratings on the stock.

Morgan Stanley has maintained its ‘overweight’ rating on Varun Beverages with a price target of ₹674. This is a 24% upside from Monday’s closing price of ₹543.10 apiece.

The brokerage has reiterated the guidance for volume and margin in the 2025 calendar year. It said the growth momentum in the first quarter of this year remains strong.

It added it does not see any effect of competition from Campa in the country. The market already had 20% share of B brands, which were cheaper than Pepsi. It also said the market is large enough for new competition.

The brokerage said the distribution expansion opportunity is in double digits from four million outlets remaining the driver of growth.

Emkay Global too has retained its ‘buy’ rating on the stock and maintained the target price of ₹800 apiece, a 47.3% upside to Monday’s closing price. It added that aggressive price wars were the key risk for the stock.

It said Varun Beverages‘ EBITDA was largely in-line with estimates. Despite rising competition in India, the company is confident of delivering a double-digit volume growth in the near term, backed by investments for enhancing capacity/distribution, new product innovations such as Sting Gold, Jeera, and a strong start to the 2025 calendar year.

Emkay Global aid the initial ramp up of the acquired South African region is also on track, with 12.5% volume growth in 2024, which was helped by focus on the more profitable GT channel and aggressive visi-cooler placements.

It said the management commentary did not hint at margin pressure in India, while margin for international should inch up with planned backward integration and better channel mix.

The brokerage also noted that given the QIP proceeds of 75 billion, Varun Beverages is now net debt-free and capex outlook does not suggest any need for external capital to pursue organic growth or ramping up acquired regions.

“We stay constructive, baking in the strong execution, on-the-ground strengths, and capital investments,” it added.

Varun Beverages Ltd, one of the largest bottling partners of food and beverage giant PepsiCo Ltd., announced its December quarter results on Monday, February 10. It is the fourth quarter for Varun Beverages as the company reports earnings in a calendar year format.

It reported a 38% increase in revenue at ₹3,689 crore. Its net profit for the period surged by 40% to ₹185 crore. Earnings Before Interest, Tax, Depreciation and Amortisation increased by 39% to ₹580 crore, while EBITDA margin remained flat at 15.7%.

It also recommended a final dividend of ₹0.50 per equity share for the financial year ended December 31, 2024.

Record date for the same will be fixed by the Board of Directors of the company.

Varun Beverages shares were up 1.19% in early trade at ₹555 apiece on Tuesday, February 11. However, the stock was down 0.5% at ₹545 just after market open.