Shares of Varun Beverages Ltd (VBL) surged more than 5% on Wednesday (October 29) after the company announced its entry into the alcoholic beverages industry, marking a significant diversification from its traditional non-alcoholic beverage portfolio. The stock climbed to an intraday high of Rs 478.80, up from the previous close of Rs 454.15, on the National Stock Exchange (NSE).
At 12:13 PM, the stock was trading at Rs 478.15, up Rs 24.00 or 5.28%, making it one of the top gainers on the exchange.
Market Cap and Trading Details
Varun Beverages’ market capitalization stood at Rs 1.62 lakh crore, with an average trading volume of over 4.4 million shares. The stock moved within a day range of Rs 455.00 to Rs 478.80, while its 52-week range stands between Rs 419.55 and Rs 663.60.
The stock’s price-to-earnings (P/E) ratio is 56.17, with a dividend yield of 0.31%, reflecting investor confidence in the company’s long-term growth potential.
Reason Behind the Surge
The rally comes after VBL’s board approved an amendment to its Memorandum of Association (MOA) to include manufacturing, brewing, distilling, bottling, and trading of alcoholic beverages such as beer, whisky, rum, gin, vodka, and wine.
This move marks Varun Beverages’ official foray into the alcohol business, expanding its product range beyond PepsiCo’s carbonated drinks and juices. The company also announced an exclusive distribution agreement with Carlsberg Breweries A/S for select African markets, strengthening its international expansion plans.
Analyst View
Market experts believe this strategic diversification could open new revenue streams for the company and help it tap into India’s fast-growing alcoholic beverage market, which is projected to expand significantly over the next decade.
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