A $15 billion stock with positive annual returns every year since listing has more fizz left, says this analyst

Since listing in late-2016, shares of Varun Beverages have delivered positive annual returns every single year. The company has also consistently rewarded shareholders in the form of regular dividend announcements and bonus issues. It has declared three bonus issues over the last three years.

BoFA Securities wrote in its note that it remains constructive on the stock despite the strong run that it has had so far. It expects the company to sustain its strong revenue and profit growth despite the volatile macroeconomic environment.

The brokerage has listed out three drivers that could possibly drive growth for Varun Beverages going forward. First is a potential distribution upside. New territories and product lines are also possible growth drivers for the company.

Over the next three years, BoFA Securities expects Varun Beverages' revenue to grow at a Compounded Annual Growth Rate (CAGR) of 19 percent and Earnings per Share (EPS) to grow at a 23 percent CAGR. The projections are higher than the average projections for staples stocks in India, BoFA Securities said.

Although India has had an erratic monsoon, which may impact consumption in the near term, BoFA is looking beyond the adverse season for its growth projections.

Shares of Varun Beverages ended nearly a percent higher at Rs 927 on Monday. Out of the 20 analysts that track Varun Beverages, 17 of them have a buy rating, while three have a hold. Based on consensus estimates, Varun Beverages is trading at par with the average price target projections from analysts.