Brokerage firm Investec has maintained its ‘Buy’ rating on the stock and assigned a price target of ₹609 per share, implying a potential upside of 21% from Tuesday’s closing price.
According to the brokerage, Varun Beverages’ recently announced franchise alliance with Asahi marks its first non-PepsiCo partnership in India. The agreement also expands the company’s beverage portfolio through dairy-based drinks under the Calpis brand.
Investec believes the development could have broader strategic implications. It said that Varun Beverages’ amendment to its Memorandum of Association to include alcoholic beverages, along with the removal of restrictions related to special purpose vehicles (SPVs), could pave the way for a wider partnership with Asahi.
The brokerage said Asahi’s global alcoholic beverage portfolio, including brands such as Super Dry, Peroni and ready-to-drink products, could potentially be introduced in India or across Varun Beverages’ international markets through a similar operating model.
While the current agreement remains limited in scope, Investec said the strategic optionality arising from the partnership cannot be ignored and may open up a significant new growth avenue for Varun Beverages over the longer term.
Analyst sentiment on the stock remains overwhelmingly positive. Of the 28 analysts covering Varun Beverages, 24 have a ‘Buy’ rating and four recommend a ‘Hold’. None of them currently have a ‘Sell’ rating on the stock.
Shares of Varun Beverages were trading 0.64% higher at ₹507.70 on Wednesday. Despite the uptick, the stock has declined more than 4% over the past month.
