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Following an analysts’ call, investors in Nestle India reacted positively and pushed up prices over 6 percent higher.
At the meet, investors were informed about how the new launches were met with a good response and how strengthening volume led growth was also strong.
The stock has gained quite steadily in the past one month, posting gains of over 2 percent, but its three-day gain stood at over 5 percent.
Moneycontrol takes a look at what multiple brokerages are talking about the stock.
Brokerage: Motilal Oswal | Rating: Upgrade to Neutral | Target: Rs 6,160
The brokerage house highlighted that while volume growth is yet to recover in Milk and Nutrition segment, Beverages saw an uptick after a long time. Additionally, Maggi performed well in a low base environment, it added. “New products are also supporting volume growth,” the report said.
Having said that, “…the advertising growth is disappointingly low at 6% YoY in 1HCY17, despite 43 products launched between January 2016 and May 2017,” it added. The ratings upgrade is on the back of reasonable success in new launches, signs of pick-up in volumes in a couple of new launches, and limited downside.
Brokerage: Edelweiss | Rating: Hold | Target: Rs 7,039
The brokerage house said that its conviction on the firm strengthening volume led growth remains strong. “Towards double digit growth (volume led), it is strengthening positioning of existing brands, enhancing penetration and is in quest of constant innovation and renovation (43 launches over Jan 2016-May 2017). GST transition has been smooth with sales and billing starting right from Day 1,” it said in a statement. Going forward, the brokerage sees Nestle emerging one of the key beneficiaries of the pickup in urban demand.
Brokerage: CLSA | Rating: Upgrade to Outperform | Target: Raised to Rs 7,550
The research firm said that 6% rise in marketing spend for launches in H1FY17 a bit disappointing. It said that GST impacted growth in Q2FY17 & poses a threat to near-term margin. Further, it added that it was pleased with the CEO’s focus on growth.
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