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Mumbai: Brokerages have a mixed view on even as the company reported a 14.6 per cent growth in net profit for the March quarter from the year ago level, beating estimates.
The maker of Maggi noodles and KitKat chocolate reported a profit after tax of Rs 602 crore for the quarter. Revenues in the quarter rose 8.9 per cent from year ago level to Rs 3,600 crore. Shares of Nestle India ended flat at 17,086.25 on Tuesday.
Nomura, Edelweiss and HSBC have retained ‘buy’ but Investec, Emkay Global and IDBI Capital have retained ‘hold’.
CLSA has retained ‘outperform’ and Ambit has retained a ‘sell’ rating on the stock.
Analysts believe spike in in-home packaged food consumption due to the second wave of coronavirus pandemic may benefit Nestle India but valuations are making them cautious.
“We expect a 12 per cent revenue CAGR (compounded annual growth rate) for Nestle from CY20-23 (calendar year), the highest 3 year CAGR since the 2010-13 period. However, near-term headwinds on rising commodity costs, higher spends on building capabilities and valuations at 58 times CY22 earnings make us cautious,” said Investec.
Nomura expects a significant increase in new launches for Nestle and stable sales growth on the back of sustained high demand for ready-to-eat products amid the intensifying second wave of the pandemic.
The maker of Maggi noodles and KitKat chocolate reported a profit after tax of Rs 602 crore for the quarter. Revenues in the quarter rose 8.9 per cent from year ago level to Rs 3,600 crore. Shares of Nestle India ended flat at 17,086.25 on Tuesday.
Nomura, Edelweiss and HSBC have retained ‘buy’ but Investec, Emkay Global and IDBI Capital have retained ‘hold’.
CLSA has retained ‘outperform’ and Ambit has retained a ‘sell’ rating on the stock.
Analysts believe spike in in-home packaged food consumption due to the second wave of coronavirus pandemic may benefit Nestle India but valuations are making them cautious.
“We expect a 12 per cent revenue CAGR (compounded annual growth rate) for Nestle from CY20-23 (calendar year), the highest 3 year CAGR since the 2010-13 period. However, near-term headwinds on rising commodity costs, higher spends on building capabilities and valuations at 58 times CY22 earnings make us cautious,” said Investec.
Nomura expects a significant increase in new launches for Nestle and stable sales growth on the back of sustained high demand for ready-to-eat products amid the intensifying second wave of the pandemic.
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