Varun Beverages Ltd Sees Significant Open Interest Surge Amid Positive Market Momentum

Open Interest and Volume Dynamics

On 3 February 2026, Varun Beverages Ltd recorded an open interest (OI) of 62,171 contracts, up from 56,363 the previous day, marking an absolute increase of 5,808 contracts or 10.3%. This rise in OI, coupled with a futures volume of 34,320 contracts, indicates fresh positions being established rather than existing ones being squared off. The futures value stood at approximately ₹46,980.54 lakhs, while the options segment exhibited a substantial notional value of ₹14,126.91 crores, culminating in a total derivatives market value exceeding ₹50,609.67 lakhs.

The underlying stock price closed at ₹485, having opened with a gap-up of 2.72% and touched an intraday high of ₹486.70, representing a 4.37% gain on the day. This price action outpaced the Breweries & Distilleries sector, which gained 2.66%, and the Sensex, which rose 3.06%. The stock’s 1-day return of 4.11% also surpassed the sector’s 2.50% gain, underscoring its relative strength.

Market Positioning and Trend Analysis

The increase in open interest alongside rising prices typically signals bullish market positioning, as traders and investors appear to be taking fresh long positions or rolling over existing ones. Varun Beverages’ stock has reversed its recent two-day decline, suggesting a potential trend reversal supported by strong buying interest. The stock trades above its 5-day, 50-day, 100-day, and 200-day moving averages, although it remains slightly below the 20-day moving average, indicating some short-term consolidation amid a longer-term uptrend.

Interestingly, delivery volumes have declined by 28.72% compared to the 5-day average, with 25.62 lakh shares delivered on 2 February. This reduction in delivery volume may imply that short-term speculative activity in the derivatives market is driving the price movement rather than sustained accumulation by long-term investors.

Valuation and Market Capitalisation Context

Varun Beverages Ltd is a large-cap company with a market capitalisation of ₹1,64,178.64 crores, placing it among the heavyweight constituents of the beverages sector. Despite the recent upgrade in its Mojo Grade from Sell to Hold on 26 November 2025, the company maintains a moderate Mojo Score of 50.0, reflecting a balanced outlook with neither strong bullish nor bearish bias. The market cap grade of 1 indicates its significant size and liquidity, making it a viable option for institutional and retail investors alike.

Implications of the Open Interest Surge

The 10.3% jump in open interest is a significant development in the derivatives market for Varun Beverages. Such a rise often indicates that new capital is flowing into the stock, with traders positioning for a directional move. Given the concurrent price appreciation and volume patterns, the bias appears to be bullish. Market participants may be anticipating positive catalysts such as strong quarterly earnings, favourable industry trends, or strategic initiatives by the company.

However, the decline in delivery volumes suggests caution. Lower delivery participation can mean that the price rally is driven more by short-term traders and less by long-term investors accumulating shares. This dynamic can lead to increased volatility if speculative positions unwind abruptly.

Sector and Broader Market Context

The beverages sector, particularly breweries and distilleries, has shown robust performance recently, gaining 2.66% on the day. Varun Beverages’ outperformance relative to its sector and the Sensex highlights its leadership position and investor preference within the segment. The stock’s liquidity, with a tradable size of approximately ₹5.92 crores based on 2% of the 5-day average traded value, ensures that it can absorb sizeable trades without excessive price impact.

Technical indicators reinforce the positive outlook. The stock’s position above key moving averages signals underlying strength, while the slight lag below the 20-day average may represent a healthy consolidation phase before a potential breakout. Investors should monitor these technical levels closely for confirmation of sustained momentum.

Investor Takeaway and Outlook

For investors analysing Varun Beverages Ltd, the recent surge in open interest combined with strong price action suggests a cautiously optimistic outlook. The upgrade in Mojo Grade from Sell to Hold reflects improving fundamentals and technical momentum, though the moderate Mojo Score of 50.0 advises prudence. The stock’s large-cap status and liquidity make it suitable for inclusion in diversified portfolios, especially for those seeking exposure to the resilient beverages sector.

Market participants should watch for confirmation of sustained buying interest in the derivatives market and monitor delivery volumes for signs of genuine accumulation. Additionally, tracking sector trends and broader market movements will be crucial to gauge the sustainability of the current rally.

In summary, Varun Beverages Ltd is exhibiting early signs of a bullish phase supported by increased open interest and favourable price trends. While speculative activity appears elevated, the stock’s fundamentals and market positioning warrant attention from investors seeking growth opportunities within the beverages industry.

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