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The National Stock Exchange (NSE) has expanded its futures and options (F&O) segment by adding 45 new stocks, effective November 29, 2024, increasing the total to 223. This inclusion, following SEBI’s revised criteria, aims to enhance liquidity and market participation, featuring notable stocks like LIC, Jio Financial Services, and Zomato. Analysts anticipate that this move will boost trading volumes and improve price discovery for these stocks.
Emkay Global Financial has maintained a BUY rating for Varun Beverages, setting a target price of Rs 750. The company has acquired a 100% stake in SBCT/SBCG, enhancing its presence in Tanzania and Ghana, which are key markets for non-alcoholic beverages. This strategic move is expected to boost VBL's revenue by 9-10% and improve earnings through scale leverage, with the Tanzanian acquisition valued attractively at 1.2x EV/sales.
Varun Beverages Limited has acquired full ownership of SBC Tanzania and SBC Beverages Ghana for INR 13,040 Mn and INR 1,270 Mn, respectively, enhancing its presence in Africa. Following these acquisitions, the EPS estimate for CY26E has been raised by 4.0% to INR 13.4, leading to an upgraded target price of INR 770 while maintaining a "BUY" rating. The strategic expansions are expected to contribute approximately 5.0% to EBITDA and 4.0% to EPS growth in CY26E.
Neeraj Chadawar, Head of Quantitative Equity Research at Axis Securities, identifies Ethos, Trent, Varun Beverages, and DOMS Industries as stocks with limited earning downgrade potential. He notes that upcoming state election results, US policy changes, and global economic indicators may contribute to volatility in the Indian equity market. Additionally, he suggests that large-cap private banks, telecom, selected consumption, IT, and pharma sectors offer a better margin of safety in the near term.
Nifty successfully defended the 23,500 mark during a rangebound trading session, with particular attention on Eicher and Varun Beverages. Market participants are keenly observing these stocks as the trading day progresses.
Varun Beverages, the largest bottler for PepsiCo in India, plans to raise up to Rs 7,500 crore through a qualified institutional placement (QIP) to strengthen its balance sheet and fund capacity expansion. The QIP is expected to launch next month, pending shareholder approval by November 8. The funds will support investments in subsidiaries, expand the product portfolio, and facilitate strategic acquisitions.
Varun Beverages reported strong Q3CY24 results, with consolidated revenue of INR 48,047 Mn, a 24.1% YoY increase, surpassing estimates. EBITDA grew by 30.5% YoY to INR 11,511 Mn, and PAT rose 23.7% YoY to INR 6,196 Mn, driven by improved operating performance and lower tax expenses. KR Choksey maintains a BUY rating with a target price of INR 738, reflecting a 24% upside from the current market price.
Varun Beverages (VBL) is operating at maximum capacity at its new DRC facility due to strong demand, with plans to double production by August 2025. Despite a 5.7% YoY increase in domestic volumes affected by unfavorable weather, VBL is streamlining its Africa operations and anticipates significant sales from its snack business. The company aims to utilize a proposed fund raise for debt reduction, expansion, and acquisitions, maintaining a HOLD rating with a target price of INR 606.
Varun Beverages reported strong Q3CY24 results, surpassing expectations due to favorable demand trends despite weather-related challenges. The company's robust EBITDA growth, driven by cost rationalization and efficient operations in Africa, positions it well for sustainable growth, supported by ongoing plant expansions and distribution enhancements.

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