Sharekhan has given Buy recommendation for Nestle India with a target price of Rs. 19055 in its research report issued on Feb 16, 2021
Sharekhan’s research report on Nestle India
Nestle India’s (Nestle’s) revenues grew by 9.0% to Rs. 3,432.6 crore in Q4CY2020; domestic sales grew by 10.1% (export sales decreased by 7.7%). OPM expanded by 111bps to 22.6% (versus ours and street’s expectation of 23.6%). For CY2020, domestic sales grew by 8.5% with two-thirds of portfolio growing in double digits. OPM stood at 24%. Sustained product launches, likely improvement in out-of-home consumption and expansion in distribution network remain key growth drivers in the near to medium term.
We have trimmed our earnings estimates for CY2021/22 by 2-3%. In view of long term growth prospects and cheery dividend payout (of 112% for CY2020), we maintain a Buy rating with an unchanged PT of Rs. 19,055.