2-2-2: Stock Split By Largecap, 3 Days Left To Be Eligible: BUY Mega Beverages Stock Before Splitting?

Mega consumer staples company, Varun Beverages is in focus this week due to 2-2-2 factor. What is it? The company is going to split its face value of Rs 5 to Rs 2, which will be its second split in less than 2 years. YTD, the stock has surged by 23% as of September 9, 2024. Going ahead, brokerage Axis Securities has selected Varun Beverages among its top picks to buy in September 2024.

In its note, Axis Securities said, "We believe VBL is expected to continue its strong growth momentum on account of 1) Successful strategic acquisition of the Beverage Company, thereby consolidating its presence in South Africa and DRC, 2) Continued focus on expansion in its distribution reach, mainly in rural areas and 3) Commissioning of multiple green field and brownfield facilities across geographies, strengthening manufacturing capabilities and extending market reach, thus saving significant transportation costs. We believe these investments are poised to support the company's long-term growth objectives and profitability."

The target price is Rs 1,800 by the brokerage.

VBL - the second largest franchisee of PepsiCo in the world (outside the USA), manufactures Carbonated Soft Drinks including Pepsi, Mountain Dew, Seven Up, and Mirinda; Non-Carbonated Beverages - Tropicana Slice, and Tropicana Frutz; and Bottled water - Aquafina. The company accounts for ~90% of PepsiCo's beverage sales volume in India and is present in 27 States and seven UT. It is also the exclusive bottler for PepsiCo in Nepal, Sri Lanka, Morocco, Zambia, and Zimbabwe.