Buy Nestle India; target of Rs 18,490: Geojit

Geojit is bullish on Nestle India has recommended buy rating on the stock with a target price of Rs 18,490 in its research report dated February 19, 2021.

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February 22, 2021 / 03:35 PM IST

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Geojit's research report on Nestle India

Nestle India Ltd., a subsidiary of Nestle S.A., is a food processing company, primarily into manufacturing of milk products and other food products such as beverages and cereals. Q4CY20 standalone revenue rose 9.0% QoQ, with volumes growth and improved product mix. Yet, export sales remained subdued with a sharp decline in coffee exports to Turkey (-7.7% in Q4CY20). EBITDA margin expanded 60bps YoY to 22.6%, as commodity prices (Wheat, Milk, and Sugar) remained favorable, besides marketing spends spiraling with new launches. Moderating in-home consumption should benefit key segments while complete revival of Out-of-home consumption is expected to propel topline further in the near term. Hence, we upgrade our rating on the stock to a BUY with a rolled forward target price of Rs. 18,490 based on 63x CY22E adjusted EPS.

Outlook

Hence, we upgrade our rating on the stock to a BUY with a rolled forward target price of Rs. 18,490 based on 63x CY22E adjusted EPS.

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