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Global financial services firm Citi has initiated coverage on Varun Beverages with a 'Buy' rating and a target price of Rs 800, indicating a potential upside of 36% from the previous closing price of Rs 588 per share.Citi cited the company's strong market position in India and significant growth opportunities in the soft drinks sector as key reasons for its positive outlook. The brokerage highlighted Varun Beverages' go-to-market (GTM) initiatives and its ability to create new product categories as essential drivers of its expansion.Additionally, Varun Beverages is expected to benefit from its expanding geographic reach, including new territories in Africa, which Citi views as a positive medium-term catalyst. The international brokerage estimates that revenue and earnings per share (EPS) will grow at compound annual growth rates (CAGR) of 23% and 29%, respectively, over the period from CY23 to CY26.Despite the bullish call from Citi, Varun Beverages shares fell 3% to Rs 570 in Friday's trade on BSE. The stock has risen 17% year-to-date, while it has rallied 154% in the past two years.Earlier last week, HSBC also initiated coverage on Varun Beverages with a 'Buy' rating and a target price of Rs 780. In its report, HSBC highlighted that Varun Beverages has the potential to become the largest and most disruptive PepsiCo bottler in the company's history, as competition in India's bottling sector intensifies.HSBC noted that Varun Beverages could gain momentum in expanding its market share, driven by innovative digital marketing models. The company is expected to leverage new AI tools and strategies to boost sales and strengthen its presence in the Indian market.In the June quarter of FY25, Varun Beverages reported a 26% year-on-year (YoY) increase in profit after tax (PAT), reaching Rs 1,262 crore. Revenue from operations stood at Rs 7,197 crore, up 28% YoY, compared to Rs 5,611.4 crore in the corresponding quarter of the previous year. For the half-year ending June 2024, revenue showed a 21% YoY growth.The company’s EBITDA rose by 32% to Rs 1,991 crore for the June quarter of calendar year 2024.(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of the Economic Times.)

Divyadhan Recycling Industries shares made a positive debut on the NSE SME platform on Friday, opening at Rs 84, a premium of 31.25% over the issue price of Rs 64 per share.The Divyadhan Recycling Industries IPO was a book-built issue totaling Rs 24.17 crore, featuring a fresh issue of 37.76 lakh shares. The issue was subscribed 41 times over three days, with non-institutional investors leading the charge by buying 76 times the portion reserved for them. Retail investors and qualified institutional buyers (QIBs) subscribed 32 and 29 times, respectively.Incorporated in 2010, the company is into the business of manufacturing of Recycled Polyester Staple Fibre (R-PSF) and Recycled Pellets. The recycled fibre and pellets are produced from post-consumer PET bottles also known as Polyethylene Terephthalate bottles. The company started its operations in the financial year 2018-19, by manufacturing Recycled Polyester Staple Fibre (R-PSF) at their manufacturing facility based in Baddi, Himachal Pradesh.The company intends to utilise Rs 17.03 crore towards the purchase of plant and machinery. Some part of the net proceeds will be used for general corporate purposes. However, the amount utilised for general corporate purposes will not exceed 25% of the gross proceeds of the issue.Its revenue from operations for the financial year ended March 31, 2024, stood at Rs 56.13 crore versus Rs 57.34 crore in FY23 and Rs 57.78 crore in FY22. Profit after tax in the said periods stood at Rs 2.38 crore, Rs 2.16 crore and Rs 52.91 lakh. Cash flow from operating activities over the last three FYs was Rs 22.98 lakh, Rs 4.42 crore and Rs 3.84 crore, respectively.Narnolia Financial Services Limited serves as the lead manager for the issue, while Skyline Financial Services Private Limited is the registrar.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)