Motilal Oswal 's research report on Nestlé India
Nestlé (NEST)’s revenues for the quarter disappointed, weighed by ephemeral lockdown issues, which impacted manufacturing. We believe this would not pose much of a challenge going forward. EBITDA margins were in-line likely due to ad spend cuts, aligned with peers that have reported their results thus far. NEST remains among the best structural plays in the Indian Consumer space, led by: (a) massive growth opportunity in the Indian Foods space, and (b) the evident revival in topline and earnings momentum ahead of peers in recent years. Valuations are, however, rich at 67.2x CY21 EPS and 56.6x CY22 EPS. Maintain Neutral.
Outlook
We value the company at 60x Jun’22E EPS to arrive at TP of INR16,700. Maintain Neutral.
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