Mumbai: Nestle India, the maker of Maggi Noodles may report a double-digit rise in net profit in the quarter ended June, helped by strong demand as consumers resorted to pantry loading in light of the Covid-19 pandemic and the lockdown. The reduction in tax rate may also help boost profits.
The company is scheduled to announce its earnings on July 28. The commentary on demand outlook amid Covid-19 pandemic, and material cost look would be the key moniterables.
Motilal Oswal expects Nestle India to report a 14.1 per cent rise in adjusted net profit, while net sales may have risen 7 per cent. The brokerage said it expects moderate sales growth due to a strong base.
Prabhudas Lilladher expects Nestle India to report an 18.1 per cent rise in adjusted net profit, on the back of a 12 per cent increase in sales, as it estimates demand momentum to continue on account of strong growth in Maggi Noodles, tetra pack milk, chocolates and dairy whitener.
Edelweiss expects the company to report revenue, EBITDA and PAT (profit after tax) growth of 7.3 per cent, 10.2 per cent and 19.3 per cent, respectively on a year-on-year ( YoY) basis. The reduction of tax rate to 25.2 per cent on account of tax rate cut announced by the government will lead to PAT growing ahead of EBITDA.
The brokerage expects Nestle India to see a 7.5 per cent YoY growth in domestic revenues on a base of 13.1 per cent, while export revenue growth is likely to grow by 5 per cent YoY on a base of negative 13.9 per cent.
It said raw material prices have seen inflationary pressure which will put pressure on gross margins. However, cost optimisation will lead to 60 basis points (bps) EBITDA margin expansion.