Introduction
As of October 1, 2023, Varun Beverages’ share price is making headlines in the stock market. Trading at ₹611, the stock has shown a modest increase of 0.79% compared to its previous closing price. Meanwhile, the Sensex has seen a slight decline of 0.04%, currently positioned at ₹84,266.29. Throughout the day, Varun Beverages experienced fluctuations, hitting a high of ₹618 and a low of ₹605.4.
Technical Analysis
Analyzing the technicals of Varun Beverages, we see that the stock is currently trading above the 300-day Simple Moving Average (SMA) while being below the 5, 10, 20, 50, and 100-day SMAs. This indicates potential support at the 300-day SMA, while resistance may arise from the shorter-term SMAs. Investors should consider these levels as strategic points for making trading decisions.
SMA Values and Pivot Levels
The SMA values and classic pivot level analysis provide crucial insights into potential resistance and support levels for Varun Beverages:
| Resistance Levels (₹) | Support Levels (₹) |
|---|---|
| 618.73 | 606.23 |
| 624.62 | 599.62 |
| 631.23 | 593.73 |
Overall Sentiment
Current trends suggest a bearish outlook for Varun Beverages, as indicated by Mint’s technical analysis. Caution is advised for potential investors as the stock seems to be in a downward trajectory. An investor-friendly approach could involve close monitoring of both technical indicators and overall market conditions.
Fundamentals and Investment Potential
From a fundamental standpoint, Varun Beverages showcases a robust Return on Equity (ROE) of 34.15%. However, it also presents a relatively high Price-to-Earnings (P/E) ratio of 81.38, alongside a Price-to-Book (P/B) ratio of 22.96. These figures suggest that while the company is profitable, it may be overvalued at its current price point.
Future Prospects
Looking ahead, analysts forecast a median 1-year upside potential for Varun Beverages shares at approximately 10.15%, translating to a target price of ₹673.00. This projected growth makes the stock an intriguing option for investors looking for medium-term gains.
Ownership Structure
The company’s ownership breakdown reveals a healthy promoter holding of 62.66%. In the latest filings, mutual fund (MF) holdings have increased from 1.52% in March to 1.62% in June, suggesting confidence in the stock from institutional investors. Conversely, Foreign Institutional Investors (FII) have reduced their holdings from 25.78% in March to 25.32% in June, which may warrant further examination.
With valuable insights drawn from both technical and fundamental perspectives, Varun Beverages presents a complex yet potentially rewarding investment opportunity. Investors should weigh these factors carefully in their decision-making process.
