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Aug 29, 2008, 02.37 PM IST
We raise our EPS estimate for CY08 by 2.7% and for CY09 by 3% to factor in the company’s 1H08 results. Also, we build in a lower tax rate of 30% (32% earlier), as benefits of increased production from Pantnagar, a tax-free area, continue to accrue.
IIFL has recommended to add Nestle India , with 12-month price target of Rs 1830, in its report dated 7 August, 2008.
“We raise our EPS estimate for CY08 by 2.7% and for CY09 by 3% to factor in the company’s 1H08 results. Also, we build in a lower tax rate of 30% (32% earlier), as benefits of increased production from Pantnagar, a tax-free area, continue to accrue. We also build in higher revenue growth rates for categories such as prepared foods and dishes and milk products, whose growth exceeded our expectation in 1H. As a result, our new target price on Nestle is Rs 1830. We keep our target multiple unchanged at 23x one-year forward earnings, which is slightly less than Nestle’s 5-year average one-year forward PE of 23.4”. Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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