Varun Beverages has reported strong performance in its Q3CY24 results, with consolidated revenue reaching INR 48,047 million, a year-on-year growth of 24.1% that exceeded estimates by 3.6%. This revenue increase is attributed to an expanded distribution network, increased product penetration, and favorable demand trends in key markets.

The company's EBITDA increased to INR 11,511 million, reflecting a year-on-year increase of 30.5%, surpassing expectations due to improved operating performance. The EBITDA margin also saw a year-on-year enhancement of 117 basis points, reaching 24.0%. Additionally, the profit after tax (PAT) stood at INR 6,196 million, up 23.7% year-on-year, driven by better operating results and lower-than-anticipated tax expenses.

KR Choksey maintains its CY26E adjusted EPS forecast, supported by strong revenue growth, geographic expansion, and cost efficiencies. The firm reiterates a BUY rating for Varun Beverages, applying a maintained PE multiple of 57x on a CY26E EPS of INR 12.9, resulting in a target price of INR 738, which suggests a potential upside of 24% from the current market price.