Neutral Nestlé India ; target of Rs 16,700: Motilal Oswal

Motilal Oswal recommended Neutral rating on Nestlé India with a target price of Rs 16,700 in its research report dated July 28, 2020.

July 30, 2020 / 05:34 PM IST
 
 
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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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first published: Jul 30, 2020 05:34 pm

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