Stock of Nestle India fell nearly 3% in early trade today after the FMCG giant reported a 19.99 per cent year-on-year (YoY) fall in net profit for the October-December quarter. Nestle India stock slipped 2.78% to Rs 17,582 against the previous close of Rs 18,084 on BSE.
Nestle India shares are trading lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. Nestle India stock has gained 10.13% in one year but fallen 8.5% since the beginning of this year.
Market cap of the firm stood at Rs 1.73 lakh crore on BSE. Total 725 shares changed hands amounting to a turnover of Rs 4.27 crore.
The FMCG giant reported a net profit of Rs 386.66 crore for the October-December quarter, down 19.99 per cent year-on-year (YoY) from Rs 483.31 crore recorded during the same period last year.
Revenue from operations stood at Rs 3,739.32 crore, up 8.93 per cent YoY compared to Rs 3,432.58 crore reported in the corresponding period last fiscal.
The company's Board of Directors recommended a final dividend of Rs 65 per equity share for the year 2021. Nestle said that during the year, it saw broad-based, double-digit, volume and mix led growth, despite a highly volatile economic environment.
YES Securities has retained Add call for the stock considering the strong Q3 show.
"This quarter was another testament of the potential of Nestle's portfolio and margin resilience with the company delivering 8% volume growth despite the ongoing inflation and rural headwinds. Growth remains resilient given the lower 20-25% salience on rural markets and distribution efforts in semi-urban/rural markets which are driving increase in category penetration.
We build in 12%/14% revenue/PAT CAGR over CY20-23E. We reiterate our ADD rating with a revise price target of Rs 19,400 based on 60x CY23E earnings, with premium valuations supported by strong growth visibility and return ratios," the brokerage said.
Motilal Oswal has assigned a neutral rating to the stock.
"Q4 sales were in line with our estimate. Volume growth of 9.6% in CY21 was impressive, but segmental performance (declared only at the year-end) was a mixed bag, with the largest segment - milk and nutrition (43% of CY21 sales) - growing 2.6% YoY as against an impressive 16-20% in the other three segments. While there was a sequential gross margin improvement (contrary to our estimate) leading to a margin beat, the management said further material cost pressures are here to stay for the time being and may impact CY22 margin.
While we like the longer term investment case for NEST, driven by its high topline growth potential, expensive valuations and commodity cost concerns lead us to maintain our Neutral rating," said the financial services firm.
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