Varun Beverages drops 3.8% as alcobev pivot, Tunisia JV fail to lift sentiment

Varun Beverages' shares plummeted 3.82% on Wednesday, closing at ₹421.25 after the company announced strategic growth into alcoholic beverages and a new overseas joint venture. The stock, which opened at ₹447.90, saw its highest point at ₹447.90 and lowest at ₹420.20, indicating strong institutional interest. The board authorized the formation of KIVA Spirits and Company Limited, a wholly-owned Indian subsidiary focused on the RTD and alcoholic beverages segment, led by Prathmesh Mishra.

Additionally, a joint venture named Varun Beverages Tunisia SA was approved, with VBL holding 75% and Bevanda 25%. Analysts expressed cautious optimism, with JPMorgan suggesting a target price of ₹530, CLSA projecting a more bullish outlook at ₹629, and Morgan Stanley aligning with the company's October 2025 RTD opportunity. However, despite positive analyst sentiment, Varun Beverages continues to underperform relative to the Nifty Next 50, with a 14.34% year-to-date decline and 17.17% year-over-year loss. The new subsidiaries require regulatory approvals before commencing operations.