Shares of Varun Beverages were recovering on Wednesday, a day after the PepsiCo franchisee firm shed more than 5% after quarterly results disappointed investors.

What Happened: VBL reported a consolidated net profit of ₹1,252.6 crore, marking a 26% increase compared to ₹994 crore in the same quarter last year. The beverage major’s revenue from operations for the period reached ₹7,196.8 crore, up 28.2% year on year.

The company’s Board of Directors has approved an interim dividend of ₹1.25 per share and approved a 2:5 share split.

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Brokerage Views: Kotak Institutional Equities had an "add" recommendation on the stock with a target price of ₹1,625. The company's volume and value growth metrics were in line with the brokerage's estimates but EBITDA and earnings were below expectations, it said. 

Motilal Oswal maintained its "buy" rating on the stock with a target price of ₹1,850. The brokerage maintained its earnings estimates for the company for upcoming calendar years.

It expects VBL to sustain its earnings momentum due to several key factors, including an expansion into newly acquired territories across Africa, increased adoption of recently launched products, ongoing growth in both capacity and distribution, rising refrigeration in rural and semi-rural areas and an improvment in international operations.

Nuvama Institutional Equities reiterated its "buy" call but slashed its target price to ₹1,854 from the earlier ₹1,865. The company's revenue number did not meet the brokerage's estimates. It cut the firm's earnings per share estimate for the calendar years 2024, 2025 and 2026 by 5%, 6% and 5%, respectively.

Price Action: Varun Beverages was up 0.89% at ₹1,591.50 during mid-day trading on Wednesday.

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