KR Choksey has given Accumulate recommendation for Nestle India with a target price of Rs. 19472 in its research report issued on Apr 25, 2022
KR Choksey’s research report on Nestle India
For Q1CY22, Nestle India reported revenue of INR 39,807 Mn, up 10.2% YoY (6.5% QoQ). Domestic sales grew by 10.2% YoY (6.6% QoQ) to INR 37,942 Mn and export sales decreased by 1.0% YoY to INR 1,566 Mn. The robust performance in e-commerce continued for Nestle India as the channel grew by 71% YoY and contributed 6.3% of domestic sales. EBITDA for Q1CY22 stood at INR 9,247 Mn, a decrease of 0.6% YoY (increase of 6.8% QoQ) with margins at 23.2% (+8 bps QoQ/-252 bps YoY). Net profit decreased by 1.3% YoY / up 53.8%QoQ to INR 5,947 with NPM at 14.9% (-174 bps YoY/460 bps QoQ). The Board have declared an interim dividend of INR 25.0 per equity share amounting to INR 2,410 Mn.
We apply a P/E of 58x on CY24E EPS of INR 335.7 and arrive at a revised target price of INR 19,472 per share (earlier TP of INR 19,982) with an upside potential of 7.1% from the CMP. Accordingly, we maintain our rating at “ACCUMULATE” on the shares of Nestle India.