Varun Beverages shares climb 6% post stock split. Key details - Business Today

Shares of Varun Beverages Ltd climbed 6 per cent in Thursday's trade as the stock turned ex-date for stock split. The scrip traded at an adjusted price of Rs 852.70 on BSE, up 5.63 per cent over an adjusted price of Rs 807.25 for Wednesday.

The stock was split into shares with face value of 5 each today from Rs 10 apiece on Wednesday. The scrip had closed at Rs 1,614.45 (unadjusted of stock-split) on Wednesday.

Axis Securities has Varun Beverages among its top picks from the consumer sector. Varun Beverages is consistently outperforming its peers in the last several quarters despite volatile environment, the brokerage said.

Going ahead Varun Beverages is expected to perform well on account of normalcy of operation and market share gains of newly acquired territories post Covid-19 disruptions. It is also likely to gain from 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 and expansion in its distribution reach to 3.5 million outlets in 2023 from 3 million currently, Axis Securities said.

Varun Beverages is also focusing on expanding high-margin Sting energy drink across outlets coupled with increased focus on expansion of value-added dairy, sports drink (Gatorade), and juice segments.

The company, which follows the January-December as accounting year, said its net profit jumped 69 per cent year-on-year to Rs 429 crore in the March quarter. Revenue for the quarter was up 38 per cent YoY to Rs 3,893 crore on a year in year basis. Revenue growth was led by robust volume growth and an increase in net realisations. Sales volumes climbed 24.7 percent to 224.1 million cases, led by strong demand across India. Realisations in Q1 climbed 10.4 per cent year-on-year to Rs 173.7 per case due to price hikes and improvement in energy drink mix of smaller SKUs, the company said.

Ebitda margin for the quarter rose 170 basis points year-on-year to 20.5 percent.

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