Maintain Accumulate on Nestle India - Just a breather - Emkay

- Results below expectation driven by lower revenues - Revenue +13.1% yoy to Rs20.5 bn, EBIDTA 17.4% yoy to Rs 4.4bn and APAT +7.8% yoy to Rs 2.7bn

- Gained from rich product mix and channel optimization; Gross margins expanded by 300 bps yoy to 54.2% and Ebidta margins expanded by 80 bps yoy to 21.7%

- Tax outgo increased 290 bps yoy from 29% of PBT to 32% of PBT with reduction in incentives; Tahliwal factory goes on stream; hinting better growth in ensuing quarters

- Attractive FCF yield of 4% on CY13E FCF of Rs18.9 bn; Maintain 'ACCUMULATE' rating with target price of Rs 5,110/Share.

Source : Equity Bulls

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