New Delhi – Varun Beverages Ltd. (VBL), a key bottler for PepsiCo, is currently on track to record its second consecutive year of annual losses, with its shares having declined 17% so far in 2026. This follows a 23.14% drop in 2025, marking a challenging period for the fast-moving consumer goods (FMCG) stock.
The company's shares have fallen significantly, slipping 27% from their 52-week high of Rs 555.60, achieved on June 17, 2026. A notable intraday dip of 6% occurred on July 28, 2026, despite VBL reporting double-digit growth in both revenue and profit for its second quarter. Broader market volatility, partly attributed to the ongoing West Asia conflict, has also impacted investor sentiment.
Analysts Maintain 'Buy' Ratings Amidst Downturn
Despite the recent share price correction and bearish market phase, several brokerages maintain a positive outlook on Varun Beverages. HSBC recently upgraded its recommendation on the stock from 'hold' to 'buy', setting a price target of Rs 540. Similarly, Choice Broking also issued a 'buy' call, with an even higher price target of Rs 550.
Analysts point to several potential growth drivers for the company. These include accelerated international expansion and improving margins, alongside sustained volume growth within India. Deeper penetration of visi-coolers, premiumisation efforts, and diversification into new product categories such as energy drinks, dairy products, and snacks are also expected to bolster business growth. Furthermore, ventures into adjacent markets like Calpis and Carlsberg, and a proposed entry into ready-to-drink (RTD) alcoholic beverages, are anticipated to strengthen VBL's future prospects.
Key Risks Identified by Brokerages
However, brokerages also highlight potential risks to their optimistic assumptions. Intensifying competition in the beverage market and unfavorable weather conditions, which can impact beverage consumption, pose significant challenges. Additionally, there's a risk that international margins may take longer than expected to align with domestic levels, and the expansion into newer categories and adjacencies could progress more slowly than anticipated.
Regulatory uncertainties concerning product classification, formulation standards, and potential issues with labelling also present risks to the company's long-term outlook. As of October 27, 2026, Varun Beverages' market capitalization stands at Rs 1.37 lakh crore, with shares trading below their key short and long-term simple moving averages.
About Varun Beverages
Varun Beverages operates as a franchisee of PepsiCo, producing and distributing a wide array of carbonated soft drinks (CSDs), non-carbonated beverages (NCBs), and packaged drinking water under PepsiCo's trademarks across various regions.