Varun Beverages share price target cut by Citi, Jefferies but no analyst has a 'sell' rating

Shares of Varun Beverages Ltd., PepsiCo's second-largest bottling partner, opened lower on Wednesday, February 4, as brokerage reactions followed the company's December quarter earnings.

Citi maintained its 'Buy' rating on Varun Beverages but cut its price target to ₹575 from ₹675 earlier.

The brokerage said the company delivered a steady fourth quarter, though trends in the India business were mixed.

Domestic volumes rose 10.5% year-on-year, but a 4% decline in realisations, likely driven by elevated consumer promotions, has raised concerns around intensifying competitive pressures.

Strategically, Citi cited that Varun Beverages is focusing on strengthening its competitive positioning through selective ₹10 price point launches and a potential local-flavour Nimbooz variant such as jeera or cumin, which could be rolled out by March.

The brokerage added that international growth drivers remain intact. However, it expects realisation softness in India to persist in the near term, while profitability in CY26E should remain manageable if the company delivers strong growth during the key summer season.

Jefferies also retained a 'Buy' rating but reduced its target price to ₹550 from ₹610 earlier.

The brokerage flagged management commentary pointing to higher market discounts, which raises some concerns around competition.

Despite this, management remains confident of retaining margins and expects a strong CY26, aided by hopes of a normal summer.

On the earnings front, Varun Beverages reported net profit rose 36% from the year-ago period to ₹251.7 crore, while revenue increased 13.5% to ₹4,334.7 crore.

EBITDA grew 10.2% to ₹639 crore, with margins contracting 150 basis points to 14.7%.

Chairman Ravi Jaipuria said domestic volumes increased 10.5% year-on-year during the quarter, driven by the company's wide distribution network and strong brand portfolio. Full-year sales volume growth stood at 8%, impacted by unprecedented heavy rainfall.

Of the 32 analysts tracking Varun Beverages, 29 have a 'Buy' rating on the stock, while three recommend 'Hold'.