Varun Beverages is now India's fourth-largest FMCG firm after crossing Britannia's market cap

Varun Beverages reported a strong March quarter led by robust growth in volumes and realisations. The company reported a growth of 11 percent year-on-year in realisations to Rs 174 per unit. Savings in raw material prices and an improved product mix also led to a 90 basis points improvement in gross margin on a year-on-year basis.

Motilal Oswal, who has a buy rating on Varun Beverages, raised its calendar year 2023 / 2024 earnings estimate by 6 percent and 3 percent after factoring in better-than-expected realisations and margin.

At its current market price, Varun Beverages is already trading 8 percent higher than its 12-month consensus price target of Rs 1,608. Among the 20 analysts who track Varun Beverages, Emkay has the highest price target of Rs 1,850. Barring Emkay, all other brokerages have a price target below the company's current market price.

18 out of the 20 analysts who track Varun Beverages have a buy recommendation on the stock.

The company's net profit in 2022 (it follows a January-December calendar year) more than doubled to Rs 1,497 crore, while Britannia's net profit in financial year 2023 grew at a slower pace of 52 percent.

Further, market participants expect Varun Beverages to maintain its earnings momentum, underpinned by various factors like increased penetration, higher acceptance of newly launched products and many others.

Shares of Varun Beverages are trading 5.3 percent higher at Rs 1,702.95.