Varun Beverages Ltd. (VBL), the bottler of PepsiCo in India, has been having a great run at the bonuses after its announcement of a 1:2 stock split. Since the announcement, shares of the beverages giant have gone up close to 10%. In this article, we bring you all the details about the VBL stock split decision and what all the fuss is about.
VBL Stock Split Details
The board of Varun Beverages has green-lit a 1:2 stock split, subject to the approval of the company’s shareholders. The e-voting on the VBL stock split resolution began on May 4 and will continue till June 2. The shareholders of the company have approved the resolution. As per the company’s regulatory filing, 99.999% of the shareholders voted to approve the resolution.
The record date for the VBL stock split is June 15. The company expects to complete the process within two months from the date of approval. As per the company, the move is taken “to enhance the liquidity of the Company’s equity shares and to encourage the participation of small investors.”
VBL’s share price is around ₹1,700 at the time of writing. If the stock retains these levels at the time of the split, an investor who owns 1 VBL share on May 12 valued at around ₹1,700, would end up with 2 VBL shares post-split, valued at ₹850, each.
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VBL’s Recent Stock Performance
VBL has been having a great time at the bourses. The share has been hitting 52-week highs and has surged close to 18% in the past month. Even since the start of the year, the stock has climbed up over 27%. The company’s market cap also breached the ₹1 lakh crore mark for the first time on May 10.
VBL Earnings For March Quarter
VBL’s financial performance in Q4 showcased an impressive growth trajectory. The company’s net revenue soared by 38% year-over-year to ₹3,893 crore, with total sales volumes registering a 24.7% increase. The company’s EBITDA jumped up 50% YoY to ₹798.04 crore. Net profits for the period stood at ₹429.1 crore, up close to 69% from the year-ago period. The company cited factors such as operational revenue growth, margin improvement, and India’s tax rate transition as the propellers for its earnings.
VBL Analyst Calls
The company’s strong earnings received mixed reactions from brokerages. Analysts at ICICI Securities maintained the ‘hold’ rating for the stock with a price target of ₹1,400. The brokerage firm said that while they are positive about the company, the upside in the stock is capped at the company’s current valuation. On the other hand, Axis Securities maintained its ‘buy’ rating for the stock with a price target of ₹1,600. The firm noted that VBL’s March quarter results were a beat on all counts. Motilal Oswal also maintained its ‘buy’ rating for the stock with a price target of ₹1,690.
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