Improved earnings visibility, debt pruning boost shares of Varun Beverages

Volume recovery, expansion in new geographies and debt reduction are key positives

Shares of Varun Beverages (VBL), which bottles and distributes PepsiCo’s range of beverages in India and a few others countries, are up more than 19 per cent in the past week as investors bet on the company’s improving earnings outlook after the strong beat in December quarter (Q4). Varun Beverages follows the January-December accounting year.

Net sales rose 9 per cent YoY in Q4 to Rs 1,331 crore against consensus estimate of Rs 1,294 crore. This was led by 6 per cent growth in volumes, which turned positive after two successive quarters of decline. Both domestic and global volumes saw faster-than-anticipated