Motilal Oswal has given Neutral recommendation for Nestlé India with a target price of Rs. 19,400 in its research report issued on Feb 17, 2022

Motilal Oswal’s research report on Nestlé India

NEST’s 4QCY21 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.

Outlook

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.

More Info on Trent

At 15:51 hrs Nestle India was quoting at Rs 18,028.80, down Rs 61.65, or 0.34 percent.

It has touched an intraday high of Rs 18,140.50 and an intraday low of Rs 17,782.65.

It was trading with volumes of 840 shares, compared to its thirty day average of 2,202 shares, a decrease of -61.86 percent.

In the previous trading session, the share closed up 0.17 percent or Rs 31.45 at Rs 18,090.45.

The share touched its 52-week high Rs 20,599.95 and 52-week low Rs 15,900.00 on 14 September, 2021 and 24 February, 2021, respectively.

Currently, it is trading 12.48 percent below its 52-week high and 13.39 percent above its 52-week low.

Market capitalisation stands at Rs 173,825.97 crore.

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