Sharekhan has given Buy recommendation for Nestle India with a target price of Rs. 22,395 in its research report issued on Feb 17, 2022
Sharekhan’s research report on Nestle India
Nestle India (Nestle) registered good performance in Q4CY2021 in a tough business environment by achieving a volume growth of 8% in the domestic business while OPM rose by 51 bps to 23.2% (despite a drop in the gross margins). CY2021 saw a strong recovery in some categories such as prepared dishes, confectionaries and liquid beverages, which grew in strong double digits. Domestic volumes grew by 9.6%. The company is focusing on consistent growth through innovations (4.9% of domestic revenues), expanding in rural/tier-2 markets (posted better growth compared to industry) and accelerating footprints through new channels.
We maintain a Buy on the stock with an unchanged price target of Rs. 22,395. With decent earning growth visibility, consistent cherry dividend payout and underperformance to broader indices provides good entry opportunity. Stock trades at 63.3x/52.4x its CY2022E/23E EPS.
What is your view on Nestle India?
At 16:00 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.