Nestle has no reason to correct: Manish Sonthalia

In a chat with ET Now, Manish Sonthalia, Senior Vice President - Fund Manager, Motilal Oswal Securities, talks about Nestle.

ET Now: What is your call on Nestle?

Manish Sonthalia: There is a great degree of certainty about the earnings which are to come for Nestle for the next two, three, four years. So what the markets are actually doing is that rolling over the earnings multiples from which a one year forward markets have started looking two year forward, three year forward that is the way it is but I think if the company was to disappoint on earnings whatever has been estimated if 22% to 25% sort of a top line growth and 20% to 22% sort of a earnings growth if that move not to come than may be markets would give some sort of a correction to the stock price.

If the earnings are deliver than the quality of earnings, the return on equity would just ensure that nobody is a seller in this counter and in the earning multiples are just getting rolled over to one year forward, two year forward, three year forward that is the way it is. But the stock is trading expensive but the point is that it is an excellent franchise and if the earning just keep on coming through then prices have no reason to correct.