Is Varun Beverages overvalued or undervalued?

Jun 09 2025 04:10 PM IST
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As of June 20, 2023, Varun Beverages is considered very expensive with a PE ratio of 57.96 and a year-to-date return of -25.44%, indicating it is overvalued compared to its peers in the beverage sector.
As of 20 June 2023, Varun Beverages' valuation grade has moved from expensive to very expensive, indicating a significant shift in its perceived market value. The company is currently overvalued, with a PE ratio of 57.96, a Price to Book Value of 9.71, and an EV to EBITDA ratio of 32.43. These figures suggest that the stock is trading at a premium compared to its earnings and book value.

In comparison to its peers, Varun Beverages stands out with a PE ratio of 57.96, while similar companies in the beverage sector exhibit lower valuations, reinforcing the notion of overvaluation. Additionally, the company's recent performance has been underwhelming, with a year-to-date return of -25.44%, contrasting sharply with the Sensex's gain of 5.61% during the same period. This further underscores the disconnect between its high valuation and actual market performance.
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