Shares of Nestle India were up 0.42 percent at Rs 22,420 on July 28 at 9.37 am on the National Stock Exchange after the company reported double-digit growth in all categories in the April-to-June quarter of FY24.
However, different brokerages hold a mixed view on the stock. Morgan Stanley has an underweight rating on the stock with a target price of Rs 17,234 because margins were under pressure and a weaker growth was witnessed in the milk and milk products category.
Motilal Oswal has a neutral rating on the stock with a target price of Rs 22,465. The domestic brokerage firm said that Nestle India is well-positioned to capitalize on the vast opportunities in India's packaged foods segment, ensuring promising long-term revenue and earnings prospects.
Meanwhile, Nuvama Institutional Equities has a buy rating on the stock. The brokerage firm revised its target price to Rs 25,810 from Rs 24,965 earlier. Nuvama Institutional Equities said that net profit and EBITDA grew ahead of street estimates while revenue was in line with street estimates.
Segment performance
Nestle India’s prepared dishes and cooking aids portfolio reported a double digit growth driven by strong Maggie sales. Confectionary portfolio registered a double-digit growth led by high Kitkat and Munch sales, and a strong media campaign.
The beverage portfolio reported a double-digit growth which was carried by greater household penetration in Nescafe Classic, Nescafe Sunrise, and Nescafe Gold. The milk and milk products portfolio also registered double-digit growth despite high inflation in milk.
Raw materials
Nestle India’ management said that costs of edible oils, wheat, and packaging materials are in the lower range. Fuel prices have also started to soften. Meanwhile, milk prices remain stable, but Robusta (coffee) prices are currently high and are expected to remain volatile.
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