February 17, 2017 / 10:54 IST
Nestle India (NIL) reported a healthy set of numbers. Revenue, operating profit were marginally better-than-estimates amid a difficult demand environment due to demonetisation. Revenue grew 16.2% YoY to Rs 2261.3 crore (I-direct estimate: Rs 2208.7 crore) on a low base (lower contribution from Maggi post its re-launch). However, it was down 3.6% sequentially.
Outlook
We remain positive on the company’s future prospects given its thrust on a) creating a balanced portfolio through new launches and planned entry in new categories, b) aggressive communication strategies and c) expanding the reach. We expect revenue and profit to grow at a CAGR of 15.1% and 26.8%, respectively, in CY16-18E. We reiterate our BUY recommendation on the stock with a target price of Rs 7417/share.
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