Varun Beverages Limited Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Investors in Varun Beverages Limited (NSE:VBL) had a good week, as its shares rose 7.0% to close at ₹522 following the release of its quarterly results. Revenues were ₹70b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at ₹3.89, an impressive 28% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the current consensus from Varun Beverages' 23 analysts is for revenues of ₹223.1b in 2025. This would reflect an okay 5.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 8.3% to ₹9.12. Before this earnings report, the analysts had been forecasting revenues of ₹232.4b and earnings per share (EPS) of ₹9.38 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

View our latest analysis for Varun Beverages

Despite the cuts to forecast earnings, there was no real change to the ₹611 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Varun Beverages, with the most bullish analyst valuing it at ₹774 and the most bearish at ₹500 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Varun Beverages' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 25% over the past five years. Compare this to the 26 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 12% per year. Factoring in the forecast slowdown in growth, it looks like Varun Beverages is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Varun Beverages. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Varun Beverages analysts - going out to 2027, and you can see them free on our platform here.

We also provide an overview of the Varun Beverages Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.