Varun Beverages share price can remain bullish till Rs 682, know what is the sport level
Shares of Varun Beverages Ltd (VBL), the second-largest franchisee of PepsiCo outside the US, saw a significant drop of 59.50% on Thursday morning, opening at Rs 635.50 on the NSE. However, this sharp decline is not due to any adverse corporate event but rather a result of a stock split.
VBL had fixed September 12 as the record date for determining the entitlement of equity shareholders for the purpose of sub-division of existing shares. As per the corporate action, every two VBL shares with a face value of Rs 5 each have been split into five shares with a face value of Rs 2 each.
Main Points
A stock split is a corporate action that increases the liquidity of a stock by dividing the existing shares into multiple shares. In the case of VBL, the stock price has been adjusted to reflect the split ratio on both the BSE and NSE websites.
Despite the apparent drop in share price, the stock split has no impact on the company’s share capital and reserves. Investors who might be seeing a 60% fall in VBL shares on their trading apps could be viewing the unadjusted VBL price.
Despite the stock split, VBL remains a top pick among analysts. Axis Securities has included the stock in its top September stock picks, and the scrip has climbed 4.83% to hit a high of Rs 657.95 on the NSE following the corporate action.
VBL is a key player in the beverage industry and accounts for 90% of PepsiCo’s beverage sales volume in India. The company is present in 27 states and seven union territories, making it a significant player in the Indian market.
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VBL has delivered strong financial performance in recent years, with a compounded sales growth of 26% over the past five years and a compounded profit growth of 47% during the same period. The company’s return on equity (ROE) has also been impressive, reaching 35% in the last year.
The stock has also shown strong growth in its share price, with a 5-year CAGR of 60% and a 3-year CAGR of 75%. These figures indicate that VBL has been a consistent performer and has the potential for further growth in the future.
VBL produces and distributes a wide range of carbonated soft drinks, non-carbonated drinks, and packaged water sold under trademarks owned by PepsiCo. Some of the popular PepsiCo brands produced and sold by the company include Pepsi, Seven-up, Mirinda Orange, Mountain Dew, and Tropicana Juices.
In terms of revenue segments, VBL’s key products include Beverages, Other Operating Revenue, and Other Services. The company has been associated with PepsiCo since the 1990s and has established itself as a key player in the beverage industry.
Disclaimer: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.
