Nestle India Q1 Results Review - Weak Revenue Growth; Miss On All Fronts: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Nestle India Ltd. reported weak 3.3% YoY revenue growth (estimate: 8.6%) in Q1 FY25. Last eight-quarter average revenue growth was 14%. Domestic sales grew 4.2% YoY, supported by volume growth and a favorable product mix. Export sales contracted by 7.2% YoY to Rs 1.8 billion. Gross margin expanded 280 basis points YoY to Rs 57.6% (estimate: 55.5%). Gross profit was up by 9% YoY. Input prices are seeing inflation, with coffee and cocoa prices hitting all time highs. Cereals and grains (MSP led) are also seeing inflationary trends. Prices are stable for milk, edible oils and packaging. Nestle has seen a strong gross margin recovery (up 300 bp) in the last 12 months; we model a limited expansion in FY25. With 11% growth in operating costs, Ebitda margin inched up 40 bp. Ebitda grew 5% YoY to Rs 11.2 billion (estimate: Rs 12.1 billion).Nestle has been focusing on its RURBAN strategy and expanding its distribution reach in the untapped markets. E-commerce continued to deliver healthy growth, with double-digit growth in Q1. During the quarter, Nestle added 800 distribution touchpoints and increased its village coverage by 5,000 to ~205,000 villages. Nestle posted broad-based growth across brands for the last few years. We reiterate our Neutral rating with a target price of Rs 2,500 (based on 60 times P/E Jun’26E) due to expensive valuations. .Click on the attachment to read the full report:.Nestle India Q1 Results: Profit Rises 7%, But Misses Estimates.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Nestle India Q1 Results Review - Weak Revenue Growth; Miss On All Fronts: Motilal Oswal

The company has been focusing on its RURBAN strategy; hence, growth was higher in RURBAN markets, says the brokerage.

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Nestle India Q1 Results Review - Weak Revenue Growth; Miss On All Fronts: Motilal Oswal

The company has been focusing on its RURBAN strategy; hence, growth was higher in RURBAN markets, says the brokerage.

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