Varun Beverages, one of PepsiCo’s largest global franchisees outside the USA, saw its shares tumble in 2025 as long-time bullish investors appeared to lose confidence. The decline follows weak financial performance in recent quarters, impacted by adverse monsoons, intensifying competition, and rising operating costs, raising concerns over near-term growth prospects and margin sustainability.
The company’s shares started the year weak, falling a cumulative 32% in the first two months. They rebounded in March with a sharp 24% surge, recovering most of the losses.
However, the recovery was short-lived, as the stock slipped back into negative territory in the subsequent months. Despite a few intermittent positive months, the gains were insufficient to support the stock, which has declined 26% so far in 2025, trading at ₹471 apiece.
Eight-year winning streak likely to end in 2025
If the shares close the year in the negative, which now appears likely, it will mark their first annual decline since their listing. The shares made their stock market debut in October 2016, and over the following eight years, they maintained an uninterrupted winning streak, closing every year with positive returns. The year 2022 emerged as the standout, with a gain of 123%.
| Year | Varun Beverages Performance |
|---|---|
| 2017 | 72% |
| 2018 | 20% |
| 2019 | 35.50% |
| 2020 | 30% |
| 2021 | 45.33% |
| 2022 | 123.3% |
| 2023 | 87% |
| 2024 | 29% |
| 2025 | (-26%) so far |
| Source: Trendlyne | |
In a strategic move, the company entered the alcoholic beverage segment through a partnership with Carlsberg Breweries to pilot beer sales in African markets, but this did little to improve investor sentiment. The company’s 9MCY25 performance has remained subdued despite capacity additions, largely due to an early and prolonged monsoon.
Meanwhile, Varun Beverages has issued three bonus shares since July 25, 2019. The last bonus was announced in the ratio of 1:2, with an ex-date of June 6, 2022. The company has also split the face value of its shares twice since June 15, 2023. Varun Beverages last split the face value of its shares from ₹5 to ₹2 in 2024, and the stock has been trading on an ex-split basis since September 12, 2024.
Varun Beverages: Technical outlook
Anshul Jain, Head of Research at Lakshmishree, said that Varun Beverages has been trapped in the ₹536– ₹445 range for six months after breaking down from its buying climax at ₹536, indicating weakened trend strength across timeframes.
“The base remains loose, volatility is rising, and volume patterns show no significant accumulation, leaving the stock vulnerable. With VBL unable to reclaim the upper band, Jain notes that the probabilities now favor a range breakdown,” said Jain.
He projects that a breach below ₹445 would trigger the next leg lower, opening a clear path toward ₹329.75, which aligns with the measured target from the buying climax. Until supply diminishes, VBL remains a sell on breakdown setup.
Brokerages bullish on future growth drivers
Despite temporary disruptions caused by prolonged rainfall across India, brokerages remain bullish on the company’s long-term growth prospects. Axis Securities, JM Financial, and Motilal Oswal have all retained their ‘Buy’ calls on the stock, following the company’s Q3CY25 results, with target prices ranging between ₹570 and ₹580 per share.
They expect the company to sustain strong growth, driven by key strategies such as the BevCo acquisition in South Africa and DRC, expansion of its snacks portfolio in Zimbabwe and Zambia, enhanced rural distribution, new manufacturing facilities to optimize capacity and logistics growth in high-margin beverages including Sting, Gatorade, and juices, and entry into alcoholic drinks, which could strengthen the company’s long-term growth and profitability.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
