DAM Capital has maintained its Buy rating on Varun Beverages Ltd. (VBL), with a target price of ₹670, citing the recent stock price correction as an attractive entry point for long-term investors.
The brokerage expects a strong demand acceleration in the near term, driven by:
- A prolonged and more intense summer, which should lead to higher beverage consumption.
- 20% YoY capacity expansion, which strengthens VBL’s production capabilities to meet increased demand.
DAM Capital projects a 19% CAGR sales growth for VBL over CY24-26E, supported by 16% volume growth, while EPS is expected to grow at a 26% CAGR. Given its market leadership in the fast-growing beverage sector, VBL remains a preferred pick in the consumer discretionary space.
