Buy Nestle India, target price Rs 21700: Axis Securities

Axis Securities has buy call on Nestle India with a target price of Rs 21700. The current market price of Nestle India is Rs 19681.95.



Nestle India key Products/Revenue Segments include Milk Products, Prepared Dishes & Cooking aids, Confectionery, Beverages (Powdered), Export Incentives, Other Operating Revenue for the year ending 31-Dec-2022.

Financials
For the quarter ended 31-12-2022, the company has reported a Standalone Total Income of Rs 4286.34 Crore, down -7.26 % from last quarter Total Income of Rs 4621.64 Crore and up 13.80 % from last year same quarter Total Income of Rs 3766.65 Crore. Company has reported net profit after tax of Rs 628.06 Crore in latest quarter.

The company’s top management includes Mr.Suresh Narayanan, Mrs.Swati A Piramal, Mr.Rajya Vardhan Kanoria, Mr.David S McDaniel, Mr.P R Ramesh, Mr.Matthias C Lohner, Ms.Anjali Bansal, Mr.Alpana Parida. Company has S R Batliboi & Co. LLP as its auditors. As on 31-12-2022, the company has a total of 10 Crore shares outstanding.

Investment Rationale
The brokerage remains positive on Nestle as it consistently delivered resilient performance led by efforts towards rural penetration and market share gains through the RURBAN strategy; constant focus on innovation (launching 110+ products in the last seven years); premiumisation in the core categories and launching differentiated products; entry into new categories of the future (Purina Pet care and Gerber’s for toddlers); and introduction of D2C platform to gauge consumer attention.

Promoter/FII Holdings
Promoters held 62.76 per cent stake in the company as of 31-Dec-2022, while FIIs owned 12.12 per cent, DIIs 9.0 per cent.