Varun Beverages shares rise 105% from 52-week low, how strong is the uptrend?

Varun Beverages shares rise 105% from 52-week low, how strong is the uptrend?

Shares of Pepsico bottler Varun Beverages have climbed 105% from their 52 week low in a year. The FMCG stock, which fell to a 52 week low of Rs 687.50 on April 20, 2023, was trading at Rs 1414 in early deals on Thursday.  In comparison, the benchmark Sensex has gained 23% during the period.

Global brokerage Morgan Stanley has initiated coverage on the FMCG stock with an overweight stance. It has assigned a price target of Rs 1701 to the Varun Beverages stock.

Morgan Stanley said Varun Beverages was expected to deliver 19% annual revenue growth for its India business in the next three years, with EBITDA margins remaining steady, averaging 23.7%.

Preference for mass discretionary names in 2024 also makes Varun Beverage a proper fit (to investors’ portfolio), its note said.

Aditya Gaggar, Director of Progressive Shares said, “The stock is in the primary uptrend and currently, it’s consolidating in the range of Rs 1350-Rs 1540. Considering a secular uptrend, we are anticipating a higher breakout; in that case, the approximate target comes to Rs 1,730.”

Abhijeet from Tips2trades said, “Varun Beverages stock price is slightly bullish on the Daily charts with strong support at Rs 1347. A daily close above the resistance of Rs 1430 could lead to a target of Rs 1560 in the near term.”

Axis Securities has a target of Rs 1550 for the Varun Beverages stock.

“The firm is expected to continue its strong growth momentum on account of normalcy of operation and market share gains of newly acquired territories post COVID-19 disruptions. It cited the management’s continued focus on the efficient go-to-market execution in acquired and underpenetrated territories as reflected in its recently commissioned Bihar plant operations. Besides, the brokerage pointed out the expansion in VBL’s its distribution reach, focus on expanding high-margin Sting energy drink across outlets coupled with increased focus on expansion of value-added dairy, sports drink (Gatorade) and Juice segment and robust growth in the International geographies,” said the brokerage.

Varun Beverages shares were trading flat at Rs 1416.50 on Thursday against the previous close of Rs 1405 on BSE. The stock touched its all-time high of Rs 1560.30 on February 26, 2024.

A total of 0.63 lakh shares of the firm changed hands, amounting to a turnover of Rs 8.93 crore on BSE. Market cap of the firm rose to Rs 1.84 lakh crore. The stock zoomed 300% in two years and rose 544% in three years.

In terms of technicals, the relative strength index (RSI) of Varun Beverages stands at 47.5, signaling the stock is trading neither in the overbought and nor in the oversold zone. Varun Beverages shares stand higher than the 100 day, 150 day, 200 day but lower than the 5 day, 10 day, 20 day 30 day and 50 day moving averages.

Varun Beverages is a beverage company. It operates franchisee of PepsiCo. The company produces and distributes a range of carbonated soft drinks (CSDs), as well as a large selection of non-carbonated beverages (NCBs), including packaged drinking water sold under trademarks owned by PepsiCo.

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