PepsiCo's India Bottler Feels The Heat At Bourses As Cola Wars Intensify

Shares of Varun Beverages shed the gain of the past two sessions as the stock fell over 5% on Thursday as the country’s ‘cola’ market seems to be getting ready for a price war.

What Happened: The drop comes as media reports surfaced stating that Coca-Cola is slashing prices of its 200 ml bottle by ₹5. This follows the entry of Reliance Industries in the cold beverages market with the iconic brand Campa Cola. The company launched a 200 ml bottle priced at ₹10, undercutting the existing prices set by Coke and Pepsi.

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Market experts believe that the cola market is expected to witness significant growth opportunities on the back of favourable climate conditions. In their latest note on VBL, brokerage firm Motilal Oswal said that rural electrification and increasing fridge penetration should further fuel growth in rural and semi-urban areas, which account for – 60% of the company’s revenue.

The firm maintained its ‘buy’ rating on the stock with a target price of ₹1,620 – a close to 20% upside from the stock’s last closing price of ₹1,346.55.

Price Action: Shares of VBL were down 2.72% to trade at ₹1,309.25 in the late hours of trading on Thursday.

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Posted In: coca-cola companyMotilal Oswal Financial ServicesPepsiCo Inc.Reliance Industries LtdVarun Beverages