Nestle India March Quarter Results Review - Steady Performance; But Valuations Expensive: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Nestle India Ltd. reported 9% YoY revenue growth (estimate: 8.5%) during the quarter ended March 2024. The company has achieved 12% revenue compound annual growth rate over a five-year period (CY18-FY24). Domestic sales grew 9% YoY, well supported by pricing, mix, and volume growth. Export sales rose 19% YoY to Rs 2.3 billion for the quarter..Gross margin expanded 300 bp YoY to 56.8% (in line); gross profit was up 15% YoY. Input prices are witnessing inflationary pressures, with coffee and cocoa prices at all time highs. Cereals, grains (MSP-led), and milk are also experiencing high inflation. Nestle India posted a strong gross margin recovery last year (up 300 bp in the last 12 months); but FY25 may see some pressure on gross margin. Ebitda margin expanded 220 bp YoY, while Ebitda rose 19% YoY to Rs 13.4 billion (estimate: Rs 12.8 billion)..Nestle India has entered into a joint venture agreement with Dr. Reddy’s Laboratories Ltd. aimed at introducing its health science nutraceutical portfolio to consumers. This JV is likely to become operational in Q2 FY25. The company has also launched NESPRESSO coffees and machines in India, with plans to open the first NESPRESSO boutique in Delhi. .Nestle India has been strategically implementing its RURBAN strategy to expand its distribution reach in the untapped markets. There has been a broad-based growth across brands for the last few years. Reiterate Neutral with a target price of Rs 2,400 (based on 60 times price/earning Mar-26E) due to expensive valuations..Click on the attachment to read the full report:.Nestle India March Quarter Results Review - Robust Topline Growth Ahead Of Peers: Nirmal Bang.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Nestle India March Quarter Results Review - Steady Performance; But Valuations Expensive: Motilal Oswal

The company has been building its strategy around its RURBAN concept; therefore, growth rates are higher in the RURBAN markets.

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