Varun Beverages Ltd Sees Sharp Open Interest Surge Signalling Market Positioning Shift

Open Interest and Volume Dynamics

On 29 Dec 2025, Varun Beverages recorded an open interest (OI) of 84,301 contracts in its derivatives, marking an 11.99% increase from the previous OI of 75,274. This rise of 9,027 contracts is significant, indicating fresh positions being established or existing ones being rolled over. The volume for the day stood at 96,354 contracts, reflecting robust trading activity and liquidity in the futures and options market for VBL.

The futures value traded was approximately ₹1,38,691.83 lakhs, while the options segment saw an astronomical notional value of ₹36,313.29 crores, culminating in a total derivatives turnover of ₹1,42,280.13 lakhs. This level of activity underscores heightened interest from market participants, possibly driven by expectations of price movement or hedging strategies.

Price Performance and Technical Positioning

Varun Beverages has outperformed its sector by 0.74% on the day, with a modest gain of 0.33%. The stock has been on a two-day consecutive gain streak, delivering a cumulative return of 1.18%. Intraday, it touched a high of ₹494.35, up 2.38% from the previous close, signalling bullish momentum.

Technically, the stock is trading above its 5-day, 20-day, 50-day, and 100-day moving averages, which typically indicates short to medium-term strength. However, it remains below the 200-day moving average, suggesting that longer-term resistance levels have yet to be breached. This mixed technical picture may be prompting traders to position cautiously, reflected in the rising open interest.

Investor Participation and Liquidity

Delivery volume on 26 Dec surged to 37.54 lakh shares, a 19.49% increase compared to the five-day average delivery volume. This rise in delivery volume indicates genuine investor interest and accumulation rather than purely speculative trading. The stock’s liquidity is also adequate, with a trade size capacity of ₹6.08 crore based on 2% of the five-day average traded value, making it accessible for institutional and retail investors alike.

Market Positioning and Directional Bets

The surge in open interest alongside rising volumes and price gains suggests that market participants are increasingly bullish on Varun Beverages. The increase in OI by nearly 12% indicates that new long positions are likely being added, or short positions are being covered, reflecting a positive directional bias.

Given the stock’s outperformance relative to the beverages sector and the broader Sensex, investors may be anticipating favourable earnings, volume growth, or strategic developments. The underlying value of the stock at ₹482, combined with its large market capitalisation of ₹1,63,519.16 crore, positions it as a key player in the beverages sector, attracting institutional interest.

However, the stock’s Mojo Score remains at 50.0 with a Mojo Grade of Hold, upgraded from Sell on 26 Nov 2025. This suggests that while the stock shows improving fundamentals and technicals, it is yet to demonstrate a strong buy signal. Investors should weigh the recent positive momentum against the need for confirmation of sustained growth and profitability.

Comparative Sector and Market Context

Varun Beverages’ 1-day return of 0.13% contrasts favourably with the beverages sector’s decline of 0.65% and the Sensex’s fall of 0.41%. This relative strength highlights the stock’s resilience amid broader market pressures. The beverages sector, often considered defensive, is currently experiencing mixed sentiment, making VBL’s outperformance noteworthy.

Its market cap grade of 1 indicates a large-cap status, which generally implies greater stability and institutional interest. This status, combined with rising open interest and volume, may attract further inflows from funds seeking exposure to quality large-cap stocks within the consumer staples space.

Implications for Investors

The current surge in open interest and volume in Varun Beverages’ derivatives market is a strong indicator of shifting market sentiment. Investors should monitor whether this momentum sustains and if the stock can break above its 200-day moving average, which would signal a more definitive bullish trend.

Given the stock’s recent upgrade from Sell to Hold and its stable Mojo Score, cautious optimism is warranted. Investors may consider accumulating on dips while keeping an eye on broader sector trends and company-specific developments such as quarterly earnings, volume growth, and margin expansion.

Additionally, the rising delivery volumes suggest genuine accumulation rather than speculative trading, which bodes well for medium-term price stability. However, the large notional value in options trading also implies that hedging and volatility strategies are active, which could lead to short-term price swings.

Conclusion

Varun Beverages Ltd is currently exhibiting signs of renewed investor interest as evidenced by a near 12% rise in open interest and robust trading volumes in its derivatives segment. The stock’s outperformance relative to its sector and the broader market, combined with improving technical indicators and rising delivery volumes, points to a cautiously optimistic outlook.

While the Mojo Grade remains at Hold, the upgrade from Sell and the positive price action suggest that Varun Beverages is on the radar of institutional and retail investors alike. Market participants should continue to monitor open interest trends, price movements, and sector dynamics to gauge the sustainability of this momentum.

Overall, the derivatives market activity signals a growing conviction in Varun Beverages’ near-term prospects, making it a stock to watch closely in the beverages sector.

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