Buy Nestle, target Rs 1699: Angel Broking

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Angel Broking has maintained buy rating on Nestle India with target price of Rs 1699 implying 12 month perspective in its March 05, 2008 research report. "For 4QCY2007, Nestle reported a strong Topline growth of 22% yoy to Rs 896cr (Rs 736cr) ahead of our expectation of a 15% growth to Rs 846cr. Revenue growth was aided by steady growth in its Net Domestic Sales (up 22% yoy to Rs 803cr) and buoyant Exports (up 22% yoy to Rs 93cr). Both volume and value growth contributed to higher sales."

 

"The company's efforts to focus on innovation and renovation supported by ongoing strategic transformation also helped boost growth. Products like Nescafe, Maggi, Nesvita, Kitkat and Munch continued to perform strongly and led their respective categories. We believe Nestle offers the best opportunity to play out the growing Food Processing theme in India. At the CMP of Rs 1,432, the stock is trading at 22x CY2009E Earnings and 13.7x EV/EBITDA. Nestle justifies its premium valuations compared to its peers on account of its global parent support, strong brand recall, excellent Return Ratios and superior EBITDA Margins. We maintain a Buy on the stock, with a Target Price of Rs1,699 (based on DCF valuation model)," according to Angel Broking research report.  

 

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Attachments : Nestle - RU4QCY2007- 050308.pdf