Global brokerage firm Citi has reaffirmed its positive stance on Varun Beverages , maintaining its 'Buy' rating with a price target of ₹675 per share.

Analyst Recommendation

The maintained 'Buy' rating indicates Citi's continued confidence in the beverage company's business model and growth trajectory. The price target of ₹675 suggests the brokerage sees potential upside in the stock from current trading levels.

Market Implications

Citi's decision to maintain its 'Buy' recommendation reflects the brokerage's assessment of Varun Beverages' market position and operational performance. The unchanged rating suggests stability in the analyst's view of the company's fundamental strengths and competitive positioning in the beverage industry.

The price target of ₹675 provides investors with a benchmark for the stock's potential performance according to Citi's analysis.

This reaffirmation of the 'Buy' rating indicates Citi's continued confidence in Varun Beverages' prospects, suggesting a positive outlook for the company's future performance in the beverage market.

Varun Beverages Limited has proposed a complete takeover of Twizza Proprietary Limited, a South African beverage manufacturer, as part of its strategic expansion into Africa's largest soft drinks market. The company has released a comprehensive board presentation detailing the ₹11,187 crore acquisition through its subsidiary The Beverages Company Proprietary Limited (Bevco).

Strategic Takeover Details

The proposed full takeover involves acquiring 100% stake in Twizza Proprietary Limited, positioning Varun Beverages to capitalize on significant growth opportunities in the African beverage market. The transaction represents a major step in the company's international expansion strategy.

South African Market Opportunity

South Africa represents the largest soft drinks market in Africa with favorable demographic trends supporting the takeover rationale. The market demonstrates strong growth potential with a 5-year compound annual growth rate of 3.30% in industry volume, projected to reach 1,468 million 8oz cases by 2029 from 1,250 million cases in 2024.

Twizza's Manufacturing Infrastructure

The takeover target, Twizza, established in 2003, operates robust manufacturing facilities across South Africa with three strategically located plants in Cape Town, Queenstown, and Middelburg. The company maintains comprehensive backward integration capabilities across all production facilities.

Growth Strategy and Market Position

The proposed takeover aligns with Varun Beverages' strategy to strengthen its position in markets where B-brands hold significant market share of slightly under 50% by volume. This presents substantial opportunities for product portfolio innovation and expansion into newer categories like energy drinks and functional beverages.

Regulatory Approvals and Timeline

The takeover proposal remains subject to regulatory approvals from competition commissions of South Africa, Botswana, and Eswatini. Upon completion, Twizza will become a step-down subsidiary of Varun Beverages Limited, providing access to established distribution networks across multiple African markets. The transaction is expected to be completed on or before June 30, 2026, subject to obtaining necessary regulatory clearances.