Varun Beverages shares witnessed a significant rise of 6% during early trading today, following the company’s stock turning ex-split in a 2:5 ratio. This move has brought renewed attention to the fast-moving consumer goods (FMCG) stock. On the Bombay Stock Exchange (BSE), Varun Beverages shares climbed to ₹665.65, up from the previous close of ₹627.60, marking a notable increase in the company’s market capitalization, which now stands at ₹2.15 lakh crore. The stock’s impressive performance has led to a remarkable return of 210% over two years and 429% over three years, making it a multibagger favorite among investors.
In terms of trading activity, 2.02 lakh shares of Varun Beverages were exchanged in early trades, resulting in a turnover of ₹13.25 crore. This increased volume reflects growing investor confidence in the stock’s potential, especially after the stock split announcement. The company’s market cap continues to climb, and this rise in share price positions Varun Beverages shares as a promising player in the FMCG sector.
From a technical analysis perspective, Varun Beverages shares are currently trading with a relative strength index (RSI) of 55.7. This RSI value suggests that the stock is neither overbought nor oversold, indicating a balanced market sentiment. Additionally, Varun Beverages shares are outperforming key moving averages, trading higher than their 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day moving averages. This technical strength signals that Varun Beverages is well-positioned for future growth, and its stock is attracting attention from both long-term investors and short-term traders.
Performance of Varun Beverages Shares on BSE and NSE
On the BSE, Varun Beverages shares hit a 52-week low of ₹331.28 on October 26, 2023, highlighting the stock’s significant upward journey since then. It also reached a 52-week high of ₹682.84, showcasing its potential to break resistance levels and continue its upward trend. This strong performance reflects the company’s growing presence in the beverage sector, driven by its association with PepsiCo and its wide range of products.
The performance of Varun Beverages shares on the National Stock Exchange (NSE) was equally impressive, with the stock rising to ₹665 in early trading, up from the previous close of ₹1569.15. A total of 31.85 lakh shares were traded on the NSE, resulting in a turnover of ₹209.31 crore. The surge in trading activity on both exchanges underscores the confidence investors have in the company’s growth prospects, especially after the ex-split trading. With a market cap of ₹2.14 lakh crore on the NSE, Varun Beverages continues to strengthen its foothold in the Indian stock market.
The stock split in the ratio of 2:5 is seen as a strategic move by the company to enhance liquidity and attract a wider base of retail investors. A stock split reduces the individual share price while increasing the number of shares available in the market, making the stock more accessible to investors. This step often boosts demand for shares and can lead to a further increase in the stock price over time.
Varun Beverages Q1 Results: A Strong Performance Boosting Shares
In addition to the positive market response to the stock split, Varun Beverages reported strong Q1 results, further fueling investor optimism. The company posted a 25.2% year-on-year increase in net profit, reaching ₹537.3 crore, compared to ₹429.1 crore in the same period last year. This substantial growth in profit highlights the company’s operational efficiency and its ability to capitalize on increasing consumer demand for beverages. Varun Beverages shares benefited from these positive financial results, contributing to their rise in early trading.
Net sales for the quarter also saw a healthy growth of 10.9%, rising to ₹4,317.3 crore from ₹3,893 crore in the corresponding period last year. This increase in sales reflects the company’s expanding market share and its ability to meet the growing demand for beverages in India and other regions where it operates. As a major franchisee of PepsiCo, Varun Beverages produces and distributes a wide range of carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs), including packaged drinking water under PepsiCo’s well-known trademarks.
Varun Beverages’ robust financial performance, combined with the stock split, has positioned the company as a key player in the FMCG sector. Its ability to deliver strong returns to shareholders while expanding its product portfolio and market presence makes it an attractive investment option.
Outlook for Varun Beverages Shares
Looking ahead, Varun Beverages shares are likely to continue benefiting from the company’s strategic initiatives and strong financial performance. The stock split has made the shares more affordable for retail investors, potentially increasing demand and trading volume in the coming weeks. With the company’s consistent delivery of positive earnings results and its prominent position as a PepsiCo franchisee, Varun Beverages is well-positioned to capitalize on future growth opportunities.
Moreover, from a technical standpoint, the strong position of Varun Beverages shares relative to various moving averages suggests that the stock has the potential to continue its upward trajectory. Investors are watching closely for the stock to break its 52-week high, and if the company maintains its growth momentum, Varun Beverages shares could see further price appreciation in the near future.
In conclusion, Varun Beverages shares have emerged as a multibagger stock with impressive returns over the past few years. The stock split, coupled with strong Q1 earnings, has fueled investor interest, and the company’s strategic alignment with PepsiCo ensures continued growth in the competitive FMCG market. As a result, Varun Beverages shares remain a compelling option for investors looking for long-term gains in the beverage sector.
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