Motilal Oswal's research report on Nestlé India
NEST reported 2QCY23 results that are broadly in line with expectations. It delivered double-digit growth across all products, led by a better mix, healthy volume, and better pricing, along with rapid acceleration in the outof-home (OOH) business during the quarter. GP margin expanded 90bp YoY in line with our estimates. Management pointed that costs of edible oils, wheat and packaging materials is in lower range with stable milk cost and softening of fuel prices while Robusta prices are high. The e-commerce channel continued deliver robust growth and contribute 6.5% of 2QCY23 sales.
Outlook
We value the stock at 60x Mar’25E EPS to arrive at our TP of INR22,465. We reiterate our Neutral stance on fair valuations.
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