Nestle India Q3 preview | Profit may grow 10-30%; revenues likely to go up 10%

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

FMCG giant Nestle India Ltd is expected to register a year-on-year growth of 10 percent in revenue for the quarter ended December 2021, driven by increased out-of-home (OOH) consumption, experts have said.

The company is to declare its results for the quarter ended December 2021 later on February 16.

Experts expect a profit after tax (PAT) in the 10 to 30 percent range, with EBITDA margins likely to expand owing to normalisation of staff costs, pricing actions and improved operational performance.

The company had reported a PAT of Rs 483 crore with operating revenues of Rs 3,433 crore in the year-ago quarter. The PAT included a benefit of Rs 196 crore on account of reversal of provisions made for contingencies.

During the previous quarter, PAT stood at Rs 617 crore, which included a contingency provisioning of Rs 38 crore without which the profit would have been higher.

Brokerages’ views

Brokerage firm Kotak Institutional Equities models “a 10.6 percent YoY growth in net domestic revenues and 10.7 percent YoY growth in exports, which works out to a 10 percent growth on a two-year CAGR (compounded annual growth rate) basis”. It foresees the revenue for the quarter at Rs 3,792 crore.

It estimates a 330 bps YoY decline in gross margins due to input cost inflation (edible oils and packaging materials), offset by selective price hikes. On a sequential basis, the gross margins are likely to be stable.

Earnings before interest, tax, depreciation and amortization (EBITDA) at Rs 925 crore are likely to grow 22 percent on year but decline 3 percent from the previous quarter.

EBITDA margins at 24.4 percent are expected to expand by 231 bps on year and remain flat on quarter.

It pegs PAT at Rs 588 crore at a YoY growth of 22 percent. Compared to the preceding quarter, PAT is seen declining 5 percent.

Axis Securities expects the revenue to grow 10 percent on year to Rs 3,767 crore aided by the “growth in exports and domestic business on recovery in OOH consumption”.

EBITDA at Rs 942 crore is seen growing by 24 percent on year from Rs 758 crore but decline by 110 bps from Rs 952 crore in the preceding quarter.

“Despite gross margin contraction owing to higher RM prices, EBITDA margins to expand 284 bps YoY owing to normalisation of staff costs and pricing actions taken by the company,” the brokerage said in its report.

It expects the EBITDA margins of 25 percent compared to 22.2 percent achieved in year-ago period. Sequentially, the margins are likely to remain flat,

Axis expects a PAT of Rs 623 crore for the quarter at a YoY growth of 29 percent and a 1 percent growth over the preceding quarter.

Prabhudas Liladhar’s estimates for revenues are in line with Kotak and Axis Securities, with a YoY growth of 10.6 percent. Sequentially it sees revenues declining by 2.2 percent to Rs 3,795 crore.

Raw material inflation is likely to dent the gross margins, which are expected to contract by 430 bps compared to same period a year ago.

EBITDA is estimated at Rs 806 crore, with a YoY growth of 4.2 percent but a decline of 15.3 percent from the previous quarter.

The contraction in gross margins is seen percolating to EBITDA margins, too, which are likely to contract by 330 bps on year to 21.2 percent.

Prabhudas forecasts a PAT of Rs 525 crore at a YoY growth of 9.2 percent and a sequential decline of 15.6 percent.

Key monitorables from the management’s commentary would be its outlook on in-home consumption trend, raw material prices, pricing action and new product launch pipeline.

Nestle India stock closed at Rs 18,1871, up Rs 516.85, or  2.92 percent, on February 15 from the previous day’s close at the National Stock Exchange.

The stock has generated returns of 4 percent in the past year but is down 6 percent in the past month.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.