Nestle India Q3 Review - Healthy Sales; Material Cost Concerns Persist: Motilal Oswal
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Motilal Oswal Report
Nestle India Ltd. reported sales in line with our estimates. Growth of 9.6% in Q3 2021 on a base of 10.1% in Q3 2020 indicates a healthy demand trend.
In a welcome new disclosure, Nestle's quarterly press release now has commentary on segmental growth, and growth for the quarter seems to be broad based across the four key segments.
On a high Ebitda margin base, operating profit and profit after tax growth came in tepid at 5.9% and 3.2%, respectively, especially as material cost inflation led to the lowest gross margin in 17 quarters in Q3 2021.
The press release indicated commodity costs pressures are likely to persist.
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