Shares of Varun Beverages Ltd (VBL), a key PepsiCo bottler, saw significant attention on Tuesday, April 28, 2026, following the company's strong performance in the March quarter. The company reported better-than-expected revenue growth and a resilient bottom line, prompting several brokerages to revise their earnings estimates and target prices upwards.
Robust Q1 Performance Fuels Optimism
Varun Beverages delivered a strong quarter, with consolidated revenue growing by 16% year-over-year. This growth was primarily driven by impressive volume increases of 14.4% in India and a substantial 21.4% in international territories. Despite a slight dip in India's net realizations due to pack upsizing and strategic price-point launches, consolidated net realization per case improved by 1.6%, boosted by international market performance.
Brokerage firm Emkay Global noted an 11% beat in profit after tax (PAT), which contributed to a 5-6% increase in their earnings per share (EPS) estimates. They also highlighted the positive impact of recent consolidations, including Twizza, on VBL's outlook.
Brokerages Lift Price Targets Amid Favorable Outlook
Following the positive results, several financial institutions reiterated their confidence in VBL's growth trajectory:
- Emkay Global maintained a 'Buy' rating and raised its target price by 15% to Rs 620, up from Rs 540. They anticipate even stronger growth trends in the June quarter, supported by a low base from May and June, and tailwinds from the Twizza and Crickley consolidations.
- MOFSL also reaffirmed its 'Buy' rating, setting a target price of Rs 600. The brokerage cited VBL's strong position for healthy Q2CY26 growth, attributing it to the El Niño-led heatwave and the integration of Twizza and Crickley. They increased their CY26/CY27 earnings estimates by 4% and 6% respectively.
- Elara Securities adjusted its 2026 and 2027 EPS estimates upwards by 3.1% and 5.2%, respectively, driven by an expected increase in EBITDA margins. Consequently, Elara raised its target price to Rs 560 from Rs 535, maintaining an 'Accumulate' rating.
- Nuvama Institutional Equities tweaked its 2027–28 EPS estimates by 2-4% and lifted its target price to Rs 600 from Rs 558, retaining a 'BUY' recommendation. Nuvama expects the El Niño effect to drive severe heatwaves in H1FY27, supporting robust growth across summer categories.
Analysts also pointed to VBL's proactive investments in distribution networks and capacity expansion as a key competitive advantage amidst global supply chain disruptions. Improved free cash flow generation is also anticipated, with organic capital expenditure for 2026 projected at Rs 500 crore.
Dividend Declared for Shareholders
In addition to the strong financial performance, Varun Beverages' board of directors recommended a final dividend of Rs 0.50 per equity share, based on a face value of Rs 2 per share. The company has set Friday, May 1, 2026, as the record date for this dividend. Eligible shareholders can expect the payment to be disbursed on Tuesday, May 5, 2026.