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Buy Nestle India; target of Rs 21,700: Sharekhan

Sharekhan is bullish on Nestle India has recommended buy rating on the stock with a target price of Rs 21,700 in its research report dated July 28, 2022.

July 31, 2022 / 02:42 PM IST
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Sharekhan's research report on Nestle India


Nestle India (Nestle) clocked resilient revenue growth of 16.4% led by a mix of consistent volume growth (~8%) and price hikes (8.5%) while raw material inflation of 15% resulted in a 369 bps decline in OPM to 20.7%; PAT decreased by 4% to Rs. 515.3 crore. Domestic volume growth stood at 6-9% in the past few quarters. Management expects volume growth momentum to sustain led by sustained innovation, better penetration of key brands in the rural market and foray into new categories. Raw material inflation will curb near-term margins. Better revenue mix, supply chain initiatives, operating efficiencies and stable raw material prices would help EBIDTA margins improve in the coming years. Stock trades at 61.2x and 52.2x its CY2023E and CY2024E earnings.


Outlook


We maintain a Buy recommendation on the stock with a revised PT of Rs. 21,700.


For all recommendations report, click here

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Nestle India - 290722 - khan

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first published: Jul 31, 2022 02:39 pm
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