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Buy Nestle, tgt Rs 1896: India Infoline
India Infoline has maintained buy raitng on Nestle with target price of Rs 1896. At the current market price of Rs1,633, the stock is trading at 23.2x F12/09E EPS of Rs70.2.
India Infoline has maintained buy raitng on Nestle with target price of Rs 1896 in its August 01, 2008 report. "We believe Nestle is one of the best plays on the healthy growth potential in the Indian food-processing sector. Nestle management has been making attempts to widen the export basket of products and we believe the company to bring exports growth back on track in the near future. With the increasing share of prepared dishes and cooking aids from the Uttaranchal plant, the excise duty burden has also reduced. We expect firm raw material prices and higher adspend to restrict margin expansion going forward. Strong brand portfolio (like Nestle, Maggi, Nescafe), expansion plans in the food business and new product launches (may also launch products from its global portfolio) will drive growth. At the current market price of Rs1,633, the stock is trading at 23.2x F12/09E EPS of Rs70.2. We recommend BUY with a oneyear price target of Rs1,896, an upside of 16.2%: says India Infoline report.
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