Accumulate Nestle India, target price Rs 19,725: Nirmal Bang Securities
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-2020.
By ETMarkets.com | Updated:
Nirmal Bang Securities has accumulate call on Nestle India with a target price of Rs 19725. The current market price of Nestle India is Rs 17504.55.
Nestle India, incorporated in the year 1959, is a Large Cap company (having a market cap of Rs 168045.36 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-2020.
Financials
For the quarter ended 31-12-2021, the company has reported a Standalone Total Income of Rs 3766.65 Crore, down 3.82% from last quarter, Total Income of Rs 3916.23 Crore and up 8.76% from last year same quarter, and Total Income of Rs 3463.18 Crore. Company has reported net profit after tax of Rs 386.66 Crore in latest quarter.
Investment Rationale
The structural story for Nestle India remains strong in the fast-growing packaged foods space in India. In Oct’20, the company had announced a significant capex of Rs 26bn over 3-4 years across its portfolio (Prepared Dishes, Coffee & Tea and Confectionery), out of which, > Rs 10bn has already been invested till date.
These factors, along with market leadership in ~85% of its categories lend enough pricing power to combat inflationary pressure, drive premiumization besides maintaining decent volume growth. The brokearge remains confident that Nestle India will be able to sustain its healthy earnings growth and thus are building in ~15% EPS CAGR over CY21-24E.
Promoter/FII Holdings
Promoters held 62.76 per cent stake in the company as of 31-Dec-2021, while FIIs owned 12.35 per cent, DIIs 7.89 per cent.
Nestle India, incorporated in the year 1959, is a Large Cap company (having a market cap of Rs 168045.36 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-2020.
Financials
For the quarter ended 31-12-2021, the company has reported a Standalone Total Income of Rs 3766.65 Crore, down 3.82% from last quarter, Total Income of Rs 3916.23 Crore and up 8.76% from last year same quarter, and Total Income of Rs 3463.18 Crore. Company has reported net profit after tax of Rs 386.66 Crore in latest quarter.
Investment Rationale
The structural story for Nestle India remains strong in the fast-growing packaged foods space in India. In Oct’20, the company had announced a significant capex of Rs 26bn over 3-4 years across its portfolio (Prepared Dishes, Coffee & Tea and Confectionery), out of which, > Rs 10bn has already been invested till date.
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Nestle can continue to deliver strong growth going forward and can gain share in its core categories, led by distribution expansion, further strengthening of its position in rural areas (contributes ~20-25% to domestic topline) & tier 2/3 cities and new product/variant launches, backed by R&D capabilities and faster growth in the premium portfolio.These factors, along with market leadership in ~85% of its categories lend enough pricing power to combat inflationary pressure, drive premiumization besides maintaining decent volume growth. The brokearge remains confident that Nestle India will be able to sustain its healthy earnings growth and thus are building in ~15% EPS CAGR over CY21-24E.
Promoter/FII Holdings
Promoters held 62.76 per cent stake in the company as of 31-Dec-2021, while FIIs owned 12.35 per cent, DIIs 7.89 per cent.
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