Dolat Capital recommended reduce rating on Nestle India with a target price of Rs 16813 in its research report dated July 29, 2020.
Dolat Capital's research report on Nestle India
Revenue and EBITDA came broadly in line with estimates, while APAT was a miss. Though the company suffered due to supply disruption in early part of the quarter, volume growth recovered in June, was encouraging. Out of Home categories suffered the most due to pandemic fears. We believe that these categories would take slightly longer to normalize. E-com business (3.6% contribution) witnessed strong acceleration with 122% growth. We are introducing CY20E, CY21E and CY22E EPS at Rs 213, Rs 253 and Rs 280 respectively. Considering niche play and unique positioning in multiple categories, we believe that the stock would continue to command higher premium compared to peers.
Outlook
Consequently, we have arrived at TP of Rs 16,813 (60x CY22E). However, considering rich valuations, we initiate the stock with Reduce rating. Buy on dips.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Read More