Nestle India - Q2 CY21 Result Report - YES Securities

(Rating: ADD, TP: Rs20,327, Upside: 12.9%)

View - We roll over our valuations to CY23 and build in 12%/16% revenue/PAT CAGR over CY20-23E. We reiterate our ADD rating with a PT of Rs 20,327 based on 60x CY23E earnings, with premium valuation supported by high growth visibility and return ratios.

Results summary - Nestle numbers were marginally below expectations with revenue/EBITDA/PAT growth of 14%/13.4%/10.7% vs our expectation of 16.9%/14.5%/13.1% respectively with a resilient margin performance.

Margins - Gross margins improved by 70bps YoY to 57%, however, it is still lower QoQ by 150bps. Margin continue to remain impacted by consistent inflation in milk and derivative prices offset by a superior mix. EBITDA margins remained flat at 24.4% assisted by lower employee and other expenses helped by a high base.

Shares of NESTLE INDIA LTD. was last trading in BSE at Rs. 17725 as compared to the previous close of Rs. 17909.9. The total number of shares traded during the day was 1799 in over 798 trades.

The stock hit an intraday high of Rs. 17932.7 and intraday low of 17664.9. The net turnover during the day was Rs. 31970388.

Source : Equity Bulls

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