Exclusive Webinar :Don't miss the latest webinar on Global Investing with Passive Products on June 22, 11am

Hold Nestle India; target of Rs 16,200: Emkay Global Financial

Emkay Global Financial recommended hold rating on Nestle India with a target price of Rs 16,200 in its research report dated February 16, 2021.

February 19, 2021 / 01:40 PM IST
  • bselive
  • nselive
Todays L/H

Emkay Global Financial's report on Nestle India

Q4CY20 earnings missed expectations by ~15% on account of lower margins from higher employee and marketing costs. Domestic sales growth at 10% was in line. Exports declined 8%, reducing overall growth to 9%. Domestic growth was steady but unlike some peers Nestle did not see an acceleration from Q3 despite the economy opening up further. Some moderation in in-home snacking (highlighted by Britannia) and slow recovery in the OOH channel have likely affected Q4. Operating margin miss despite 230bps GM expansion in Q4 is likely driven by one-off increase in staff and marketing costs. Input prices remain benign and moderation in opex should drive gains ahead. We estimate 200bps margins expansion over CY21-23.


We retain CY21-22 estimates and introduce CY23 estimates. Growth has been steady but slower than peers’ recently. Margin miss and rich valuations (56x CY22) should limit near-term upsides. Retain Hold with a revised TP of Rs16,200, rolling forward to Mar’23E EPS.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Feb 19, 2021 01:40 pm

stay updated

Get Daily News on your Browser