Accumulate Nestle India; target of Rs 17,667: Dolat Capital Market

Dolat Capital Market's research report on Nestle India

Nestlé’s Q4CY20 revenues came in line with our estimates with 10% volume and mix growth in the domestic market. In-house consumption brands witnessed double digit growth – supported by improved supply situation. Out of home categories continues to report sequential improvement. E-com business (3.7% contribution) witnessed strong acceleration with 111% growth. Exports decreased 7.7% YoY.

Outlook

We have marginally tweaked our CY21E and CY22E EPS estimates at Rs 259 (-2.0%), Rs 290 (-1.5%) respectively to factor in Q4 performance. Considering niche play and unique positioning in multiple categories, we believe that the stock would continue to command higher premium compared to peers. Valuing the stock at 60x CY22E EPS, we have arrived at TP of Rs 17,667. Maintain Accumulate. Buy on dips.

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