Buy Nestle India, target price Rs 22990: Sharekhan by BNP Paribas

Sharekhan by BNP Paribas has buy call on Nestle India with a target price of Rs 22990.The current market price of Nestle India is Rs 20749.

Nestle India, incorporated in the year 1959, is a Large Cap company (having a market cap of Rs 200279.55 Crore) operating in FMCG sector.

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 31-03-2023, the company has reported a Standalone Total Income of Rs 4864.22 Crore, up 13.48 % from last quarter Total Income of Rs 4286.34 Crore and up 21.54 % from last year same quarter Total Income of Rs 4002.14 Crore. Company has reported net profit after tax of Rs 736.64 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 B S R & Co. LLP as its auditors. As on 31-03-2023, the company has a total of 10 Crore shares outstanding.

Investment Rationale
Nestle’s strong positioning in the domestic food market, innovative product portfolio, and improving out-of-home consumption with a thrust on improving penetration in rural markets will help it drive consistent double-digit earnings growth in the long run. The company is supporting its consistent growth agenda by higher investments in capacity enhancement, strong brand support, and better R&D initiatives.
The stock is currently trading at 66.0x and 57.0x its CY2023E and CY2024E earnings, respectively.

Promoter/FII Holdings
Promoters held 62.76 per cent stake in the company as of 31-Mar-2023, while FIIs owned 12.06 per cent, DIIs 9.12 per cent.