Varun Beverages share price target raised by CLSA on Q1 beat, hopes of strong summer

Shares of Varun Beverages Ltd. will remain in focus after brokerages turned positive on its Q1CY26 performance, led by strong volume growth.

CLSA has maintained its 'high conviction outperform' rating on the stock and raised its price target to ₹654. The brokerage said that revenue growth of 18.3% year-on-year came in ahead of estimates, supported by 12.7% growth in standalone beverage sales.

India volumes

grew 14.4% year-on-year, although realisations declined 1.5% due to portfolio upsizing. Consolidated EBITDA beat estimates and consensus by 18% and 14%, respectively.

CLSA expects the company to benefit from a strong summer season, with new capacities aiding cost efficiencies and continued distribution expansion.

Varun Beverages is targeting 4.5 million outlets by end-2026, up from 4 million in 2025. The brokerage also mentioned comfortable inventory and raw material coverage, providing visibility for the next two quarters in international markets and around 1.5 quarters in India.

HSBC has a 'hold' rating with a price target of ₹600, stating that the company has started the year on a strong note and is likely to see healthy demand during the peak summer season.

It also said that evolving industry dynamics will require sustained investment in market development, while integration and route-to-market capabilities could drive further upside in international operations.

Jefferies has reiterated its 'buy' rating with a target of ₹615, citing that the company delivered over 14% volume growth in India with stable margins, despite concerns around rising competition, including from Campa.

The brokerage added that international markets also saw broad-based strength.

Management commentary remained optimistic on growth and margins, though partly dependent on seasonality, and emphasised the opportunity for overall market expansion rather than competitive pressures.

For the quarter, net profit rose 20% year-on-year to ₹872 crore, while revenue increased 18.3% to ₹6,721 crore. Revenue ex-excise grew 18% to ₹6,574 crore.

EBITDA rose 21% to ₹1,528.7 crore, with margins expanding 120 basis points to 22.8%. EBITDA ex-excise margins stood at 23.2%, compared to 22.7% a year ago.

Consolidated sales volumes grew 16.3%, led by 14.4% growth in India and a stronger 21.4% increase in international markets.

Realisation per case in India declined 1.5%, largely due to pack upsizing.

Management said demand trends in India remained encouraging during the quarter, with the share of low-sugar and no-sugar products increasing to around 63% of consolidated volumes.

Shares of Varun Beverages ended 5.79% higher at ₹519.15 on Monday and have rallied over 35% in the past one month.

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