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Motilal Oswal has given a neutral rating to Nestle India with a target price of Rs 16,440. The share price moved down by 1.32 per cent from its previous close of Rs 17,218.60. The stock’s last traded price is Rs 16,991.95.
Nestle India Ltd., incorporated in the year 1959, is a Large Cap company (having a market cap of Rs 164426.88 Crore) operating in FMCG sector.
Financials
For the quarter ended 30-09-2020, the company reported a Standalone sales of Rs 3525.41 Crore, up 15.91 % from last quarter Sales of Rs 3041.45 Crore and up 10.19 % from last year same quarter Sales of Rs 3199.31 Crore Company reported net profit after tax of Rs 587.09 Crore in latest quarter.
Investment Rationale
The longer-term narrative for NEST’s topline and earnings growth remains extremely attractive. Not only is the successful implementation of its growth strategy in recent years a positive, but the Packaged Foods segment in India also presents immense growth opportunities. This is particularly true for a company with a strong pedigree and distribution strength. In the near term, the stock offers better resilience at the top line v/s peers owing to the nature of its portfolio and its superior efficiency. However, current valuations of 70.5x CY21E EPS and 60.6x CY22E EPS appear to completely factor in upside for the next year.
Promoter/FII Holdings
Promoters held 62.8 per cent stake in the company as of Sept 30, 2020, while FIIs held 11.5 per cent, DIIs 8.9 per cent and public and others 16.8 per cent.
Nestle India Ltd., incorporated in the year 1959, is a Large Cap company (having a market cap of Rs 164426.88 Crore) operating in FMCG sector.
Financials
For the quarter ended 30-09-2020, the company reported a Standalone sales of Rs 3525.41 Crore, up 15.91 % from last quarter Sales of Rs 3041.45 Crore and up 10.19 % from last year same quarter Sales of Rs 3199.31 Crore Company reported net profit after tax of Rs 587.09 Crore in latest quarter.
Investment Rationale
The longer-term narrative for NEST’s topline and earnings growth remains extremely attractive. Not only is the successful implementation of its growth strategy in recent years a positive, but the Packaged Foods segment in India also presents immense growth opportunities. This is particularly true for a company with a strong pedigree and distribution strength. In the near term, the stock offers better resilience at the top line v/s peers owing to the nature of its portfolio and its superior efficiency. However, current valuations of 70.5x CY21E EPS and 60.6x CY22E EPS appear to completely factor in upside for the next year.
Promoter/FII Holdings
Promoters held 62.8 per cent stake in the company as of Sept 30, 2020, while FIIs held 11.5 per cent, DIIs 8.9 per cent and public and others 16.8 per cent.
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