While target prices for most stocks have been reduced due to this massive bear market spell the markets have entered, this stock has beaten the trend.

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Global brokerage CLSA has risen target price for Varun Beverages. It maintained a 'buy' call on the stock and has increased its target price by 8 percent to Rs 766 per share form Rs 750 earlier.

The brokerage sees multiple growth levers beyond 2020. The company remains a string proxy on long term trends of soft drink category in India, noted CLSA. It, however, cut the stock's FY20 EPS estimate and added that return on capital employed and free cash flow improvement may be pushed back due to coronavirus.

PepsiCo India's bottling partner has temporarily shut down the production and distribution facilities amid the COVID-19 lockdown and said that these will be operated as per the local guidelines.

The stock has outperformed benchmarks by falling 11 percent in the last 1 year as compared to a 26 percent fall in benchmarks.

Meanwhile, Kotak Securities also believes that Varun Beverages is a good story in the value zone. It has upgraded the stock to 'buy' from 'add' rating earlier following a 20-30 percent correction in stock price.

"2020 was shaping up to be a solid year with strong growth momentum, improved raw material outlook (fall in crude price) and pricing tailwind. COVID-19 disrupted the momentum, however, we expect the business to largely recover once the environment normalizes," Kotak said in a recent report.

The brokerage likes the firm's execution prowess, market share gain, and margin expansion opportunity. It also added Varun Beverages to its midcap portfolio.

Varun Beverages reported a robust performance in Q3, delivering a topline growth of 49.2 percent and a net profit growth of 83.7 percent. The results were supported by strong volume growth of 60.4 percent. The company reported robust volume growth as domestic organic growth up by 17.5 percent and internationally it grew 27 percent.

First Published:Apr 2, 2020 1:36 PM IST