Nestle India - Rating: Hold; Target price: Rs4825 - Centrum

We expect sales to grow by 12% in Q4CY13 led by pricing as the company increased prices across categories. We expect domestic business to grow at 9.5% YoY on the back of lower base while exports could grow by 57% YoY.

Operating profit is set to grow by 8.8% to Rs5393mn as operating margin declines by 65bps on the back of high overheads even as gross margins expand by 57bps.

Adjusted PAT is also expected to grow by 6.4% at Rs3127mn.

We upgrade the stock to Hold from Sell as we believe the worst is behind for the company and expect volume growth in H1CY14.

Source : Equity Bulls

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