Nestle India Q2 Results Review - Sluggish Revenue Growth Lingers: Dolat Capital

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..Dolat Capital Report.Nestle India Ltd.’s Q2 FY25 results were below our estimates. The domestic revenue grew by 1.2% YoY, while exports grew by 3.1% YoY. Revenue increased by 9.7% on a five-year compound annual growth rate basis.Due to inflationary commodity prices, gross margin expanded by a mere 10 basis points YoY to 56.6%. Coffee, cocoa, cereals and edible oils saw high inflation, while milk and packaging prices remained fairly stable. We believe raw material prices would pressurize gross margin, in the near term. We reduce our FY25/26E EPS estimates by 6.9/6.8% to Rs 34.0/38.6 to factor in Q2 performance and introduce FY27E EPS at Rs 44.1. Although we believe Nestle’s growth rate and profitability will remain high in the long run (given strong leadership and unique positioning in most categories), the company may also witness near-term demand and inflationary headwinds. That being said, we maintain our ‘Reduce’ rating with a target price of Rs 2,558 (Rs 2,691 earlier) valuing the stock at 58 times FY27E earnings per share..Click on the attachment to read the full report:.Nestle India Q2 Results: Margin Misses Estimates As It Slips To 2022 Levels.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 Q2 Results Review - Sluggish Revenue Growth Lingers: Dolat Capital

The brokerage maintains its ‘Reduce’ rating with a target price of Rs 2,558 valuing the stock at 58 times FY27E earnings per share.

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Nestle India Q2 Results Review - Sluggish Revenue Growth Lingers: Dolat Capital

The brokerage maintains its ‘Reduce’ rating with a target price of Rs 2,558 valuing the stock at 58 times FY27E earnings per share.

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