Varun Beverages - Likely Limited Impact Of Lockdown (If Any): ICICI Securities
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ICICI Securities Report
Based on our channel checks, we believe Varun Beverages Ltd. is likely to maintain strong double-digit volume growth, in line with earlier quarters. It has not yet raised prices of its products in spite of inflation in key raw materials such as sugar and packaging material.
It plans to focus on eastern states and is on track to set up a new plant in Bihar. We also believe lockdown (if any) would likely have a negligible impact on Varun Beverages’ sales as the lockdown is likely to be in Q1 CY22 (non-season).
We model the company to maintain Ebitda margins of ~19.5% over CY22-23E via judicious price hikes and cost-saving initiatives.
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