Varun Beverages Ltd. has acquired full stakes in SBC Tanzanian and Ghanaian bottlers and increased its share in Lunarmech Technologies to full ownership. These acquisitions aim to enhance manufacturing and distribution capabilities in Africa. The company reported a 22% rise in net profit for Q3 2024, surpassing analyst expectations, and holds a strong buy recommendation from most analysts.
Varun Beverages Ltd. has expanded its portfolio by acquiring complete stakes in multiple beverage companies in Africa and increasing its ownership in a third entity. The company’s board approved the purchase of SBC Tanzania for approximately Rs 1,304 crore and SBC Ghana for about Rs 127 crore. These acquisitions are contingent on receiving regulatory approvals from PepsiCo and various government agencies in their respective countries. Additionally, Varun Beverages plans to acquire the remaining 39.93% of Lunarmech Technologies Pvt. for Rs 200 crore, thus making it a wholly-owned subsidiary. These strategic moves are designed to strengthen Varun Beverages’ manufacturing and distribution capabilities in key markets. The company reported a 22% year-on-year increase in net profit, reaching Rs 628.8 crore for the third quarter of fiscal year 2024. This growth surpasses analyst estimates and reflects the company’s positive momentum in the beverage sector. Furthermore, Varun Beverages’ stock performance has been robust, with many analysts issuing buy ratings based on future prospects.
Varun Beverages Ltd. is known for its association with PepsiCo, serving as a major bottler of their beverages across various regions. The recent acquisitions in Tanzania and Ghana are pivotal for consolidating its presence in the African market, which presents substantial growth opportunities. Lunarmech Technologies, on the other hand, plays a crucial role in the company’s supply chain by manufacturing plastic closures for PET bottles. This enhancement in operational efficiency and production capacity is expected to drive further growth for Varun Beverages.
The strategic acquisitions by Varun Beverages signify a notable expansion in its operational scope in Africa, reinforcing its role as a key bottler for PepsiCo. By obtaining full ownership of Lunarmech Technologies, the company is set to streamline its manufacturing processes. With positive financial results and strong analyst support, Varun Beverages appears to be well-positioned for future growth in the beverage industry.
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