Shares of Varun Beverages, the largest PepsiCo bottler outside the US, have seen a sharp 17% recovery after hitting a fresh 52-week low of ₹419.55 on March 3, 2025. The stock had previously fallen as much as 38% from its 52-week high of ₹681.12 in July 2024. The decline was largely driven by a broader correction in the equity market, wiping out ₹64,000 crore from the company’s market capitalisation.
Analysts believe the rebound is due to value buying, as the stock’s price-to-earnings (P/E) ratio has significantly decreased. Jefferies highlighted that Varun Beverages is now trading at a one-year forward P/E of 45, below its five-year average and in line with some of its FMCG peers, despite better growth potential. Equity research firm CLSA also noted that the stock’s valuations had corrected, citing a drop in the one-year forward P/E ratio from 63 to 48 times, and assured that the stock is trading below its average multiple.
The company faced selling pressure due to slowing consumer demand and fierce competition from Reliance Industries’ Campa Cola, which has been aggressively expanding its market share. With an eye on the summer season, Reliance has ramped up its pricing and distribution strategies, including co-presenting rights for IPL and offering lower-priced bottles to attract customers.
Varun Beverages remains focused on strong growth prospects, especially during the crucial March to June period, when it generates nearly half of its annual volumes.
