NEW DELHI: Baby food maker Nestle India, which is scheduled to publish its March quarter earnings on Tuesday, will likely see a pressure on its topline due to the lockdown.
Edelweiss Securities estimates revenue, Ebitda and
net profit to dip ~5.8 per cent, ~21.9 per cent and ~15.4 per cent respectively year-on-year (YoY).
“Export revenue growth is likely to decline by 20 per cent YoY. Raw material prices have seen inflationary pressure which will put pressure on gross
margins (160 bps YoY). However operating leverage will lead to Ebitda margins compression of 430bps YoY,” said the broker in a report.
It pegs revenue of the company at Rs 2,827.6 crore and profit at Rs 371.8 crore.
The shares of the company have been one of the outperformers this year. The rises are up 20 per cent year to date, against a 23 per cent drop in BSE Sensex. It commands a premium valuation on
Dalal Street, trading at 87 times its earnings.
Emkay Research, a broker company, said revenue decline will be driven by lower sales during the lockdown that was implemented to check fast spread of coronavirus in the country.
“Gross margins will be lower by 100bps yoy, but we expect operating margins to remain stable due to controlled overhead costs. Lower effective tax rate will drive profit growth of 6 per cent,” the research house said.
It projects revenue at Rs 2,912.9 crore, down 3 per cent and profit at Rs 497.1 crore.
The stock fell 1.30 per cent to Rs 17,567.35 on the BSE on Monday.