Nestle India Q1 Results Review - Weak Topline; Commodity Headwinds Lingers: Yes Securities

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..Yes Securities Report.Nestle India Ltd.’s reported weak set of numbers in Q1 FY25. Domestic sales grew just 4.2% with one-fourth of it coming through a combination of volume and mix. This trend is expected to improve in coming quarters. Also, it is important to note that while the company has made huge efforts on rural distribution expansion, but its rural mix at 20-25% remains lower compared to peers. Hence, rural recovery benefit will be lower for Nestle in the coming quarters. Gross margins surprised us with a 90 basis points QoQ improvement, but higher overheads meant that Ebitda margin improvement was restricted (~80 bps below our estimate). Key commodity inflation and volatility might have an incremental impact on performance in the near-term. The stock currently trades at ~75 times/64 times FY25E/FY26E EPS. Since, we haven’t baked the benefit from the new joint venture with Dr. Reddy’s and introduction of Nespresso in our estimates, we continue to assign a slightly higher multiple of ~62 times and roll-forward to Sep’26E EPS, arriving at a revised target price of Rs 2,515 (Rs 2,420 earlier). Assign Neutral rating. .Click on the attachment to read the full report:.Nestle India Q1 Results Review - Growth Moderation In A Tough Environment; Strength In The Core: Systematix.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 Topline; Commodity Headwinds Lingers: Yes Securities

Addition of pet care, toddler nutrition segments and Nespresso, and JV with Dr. Reddy will add to medium-to-long term earnings, in the brokerage's view.

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Nestle India Q1 Results Review - Weak Topline; Commodity Headwinds Lingers: Yes Securities

Addition of pet care, toddler nutrition segments and Nespresso, and JV with Dr. Reddy will add to medium-to-long term earnings, in the brokerage's view.

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