Reduce Nestle India, target price Rs 18500: HDFC Securities

HDFC Securities has reduce call on Nestle India with a target price of Rs 18500. The current market price of Nestle India is Rs 19084.05.

Nestle India, incorporated in the year 1959, is a Large Cap company (having a market cap of Rs 183344.13 Crore) operating in FMCG sector.

Nestle India key Products/Revenue Segments include Milk Products, Prepared Dishes & Cooking aids, Confectionery, Beverages (Powdered), Export Incentives, Other Operating Revenue for the year ending 31-Dec-2021.


Financials
For the quarter ended 31-12-2022, the company has reported a Standalone Total Income of Rs 4286.34 Crore, down -7.26 % from last quarter Total Income of Rs 4621.64 Crore and up 13.80 % from last year same quarter Total Income of Rs 3766.65 Crore. Company has reported net profit after tax of Rs 628.06 Crore in latest quarter.

The company’s top management includes Mr.Suresh Narayanan, Mr.David S McDaniel, Mr.Matthias C Lohner, Mr.Rajya Vardhan Kanoria, Dr.Swati A Piramal, Ms.Rama Bijapurkar, Ms.Roopa Kudva, Mr.P R Ramesh. Company has B S R & Co. LLP as its auditors. As on 31-12-2022, the company has a total of 10 Crore shares outstanding.

Investment Rationale
The brokerage values Nestle at 52x P/E onDec-24E EPS to derive a TP of INR 18,500. With a rich valuation, the absolute upside is limited in the medium term

Promoter/FII Holdings
Promoters held 62.76 per cent stake in the company as of 31-Dec-2022, while FIIs owned 12.12 per cent, DIIs 9.0 per cent.