Motilal Oswal - Nestle India Ltd. (NESTLEIND) MOSL: NESTLE INDIA (Neutral)-Miss on top line-better operating margin salvages EBITDA

Report

Motilal Oswal

Krishnan Sambamoorthy

EUR 120.00 For Business Accounts Only

MOSL: NESTLE INDIA (Neutral)-Miss on top line-better operating margin salvages EBITDA

Nestle India: Miss on top line; better operating margin salvages EBITDA

(NEST IN, Mkt Cap USD14b, CMP INR10215, TP INR10615, 4% Upside, Neutral)

Reported net sales grew 8.9% YoY to INR30b (our estimate: INR31.7b) in 1QCY19. Domestic sales increased 10.2%, while exports fell 8.9% due to lower coffee exports to Turkey. EBITDA grew 5.3% YoY to INR7.5b (our estimate: INR7.4b). Adj. PAT was up 8.2% YoY to INR4.8b (our estimate: INR4.6b).
Gross margin shrank 60bp YoY to 58.5% due to higher commodity cost. EBITDA margin, too, contracted by 90bp YoY to 25% owing to higher staff costs (+40bp YoY to 10.1% of sales), slightly offset by lower other expenses (-10bp YoY to 23.5%).
Other income rose 30% YoY due to higher average liquidities and increased yields.
New launch update: NEST will be launching organic food products under the 'Milk Products and Nutrition' category over the coming months.

15/05/2019 1 EN

Underlying

Nestle India Ltd.

Nestle India is engaged in the food business. Co.'s product groups are: milk products and nutrition; beverages; prepared dishes and cooking aids and chocolates and confectionery. Co.'s milk products and nutrition include: NESTLE a+ Milk, NESTLE Slim Milk, NESTLE a+ Dahi, NESTLE Slim Dahi and MILKMAID Sweetened Condensed Milk. Co.'s beverages include: NESCAFE, NESCAFE SUNRISE and NESTEA. Co.'s prepared dishes and cooking aids include: MAGGI Noodles, Veg Atta Noodles, Multigrainz Noodles and 2-Minute Noodles, MAGGI HUNGROOO, MAGGI Magical Masala Noodles, MAGGI Masala-ae-Magic spice mix and MAGGI Soups.Co.'s chocolates and confectionary include: Nestle KITKAT, NESTLE MUNCH and Nestle MILKYBAR.

See profile

INE239A01016 National Stock Exchange of India India

Provider

Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

See profile

Analysts

Krishnan Sambamoorthy

Other Reports on these Companies

Motilal Oswal

MOSL : NESTLÉ INDIA: EBITDA in-line; fair valuation limits upside

NESTLÉ INDIA: EBITDA in-line; fair valuation limits upside (NEST IN, Mkt Cap USD22.9b, CMP INR19755, TP INR18700, 5% Downside, Neutral) Nestlé India (NEST) delivered a slight beat on our sales estimates. Sales growth was driven by double-digit YoY growth across segments, led by better volumes, mix and higher realizations. While demand and sentiment remained strong in metros, it was robust across smaller towns and rural markets as well – an encouraging development. Gross margin came in 170bp lower than our estimate, on account of higher commodity costs for key inputs. However, management ...

EUR 120.00

October 20, 2022 October 20, 2022 10 EN

Motilal Oswal

MOSL:NESTLÉ INDIA: Result in line; near-term margin outlook challenging

Nestlé India (NEST) declared broadly in-line 2QCY22 result. Volumes and price increases have played an equal part in driving 13.3% sales growth in 1HCY22 with volumes growing 7% and realization making up for the rest. Management pointed out that while there has been some softening in edible oil and packaging costs; milk, green coffee, wheat, etc. are at all-time high levels and are likely to remain firm for some more time. NEST’s strategy of avoiding sharp price hikes, unlike the past, means that near- term margins would continue to be under pressure. The acquisition of Purina PetCare’s In...

EUR 120.00

July 29, 2022 July 29, 2022 11 EN

TheScreener

An unfavourable environment weighs on NESTLE INDIA, which sees a downgrade to Neutral

The independent financial analyst theScreener just requalified the general evaluation of NESTLE INDIA (IN), active in the Food Products industry. As regards its fundamental valuation, the title still shows 1 out of 4 stars and its market behaviour is seen as defensive. theScreener believes that the unfavourable environment weighs on the sector and penalises the company, which sees a downgrade to its general evaluation to Neutral. As of the analysis date February 4, 2022, the closing price was INR 18,331.65 and its target price was estimated at INR 17,415.07.

Free Trial

February 5, 2022 February 5, 2022 1 EN

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality (HOMEFIRS IN, Mkt Cap USD0.9b, CMP INR802, TP INR1025, 28% Upside, Buy) HomeFirst’s 2QFY23 PAT grew 21% YoY/6% QoQ to INR543m (in-line). Credit costs grew 37% QoQ to INR50m (MOFSLe: INR31m). Underlying this, the NII grew 58% YoY to ~INR1b (in-line). ‘Other income’ grew 13% QoQ, driven primarily by higher treasury gains and investment income. Opex was 7% higher than estimated and grew 47% YoY and 14% QoQ, led by investments in new branches and resultant higher employee expenses. Disbursements grew 36%...

EUR 120.00

October 21, 2022 October 21, 2022 12 EN

Aliasgar Shakir

Aliasgar Shakir

MOSL : SHOPPERS STOP: Ticking the right boxes

. SHOPPERS STOP: Ticking the right boxes (SHOP IN, Mkt Cap USD1b, CMP INR780, TP INR805, 3% Upside, Neutral) Aided by price hikes, SHOP reported a healthy 19% revenue growth in 2QFY23 from pre-COVID levels (8% beat) on healthy (+10%) SSSG and sustained volumes. EBITDA grew 2.3x YoY (22% over pre-COVID levels), with a 540bp margin improvement. 1) A strong recovery in revenue, backed by an improved pricing; 2) expansion within the Beauty and Private Label segment; and 3) healthy annual 12/15 store additions for SHOP/Beauty are expected to drive business growth going forward. We expect a r...

EUR 120.00

October 21, 2022 October 21, 2022 13 EN

Tushar Manudhane

Tushar Manudhane

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities (ERIS IN, Mkt Cap USD1.2b, CMP INR708, TP INR860, 21% Upside, Buy) Eris Lifesciences (ERIS) delivered better than expected 2QFY23 performance, led by superior traction in new launches and improved operating leverage. ERIS is notonly sustaining the momentum in its recently launched products, but it is also preparing itself for an aggressive pace of new introductions. We reiterate our earnings estimate for FY23/FY24 and continue to value ERIS at 22x 12M forward earnings to arrive at a price target of INR860. We re...

EUR 120.00

October 21, 2022 October 21, 2022 11 EN

Sign-up for free to access full reports immediately

Email Address*

Choose Password* ( 6 or more characters )

Due to regulatory restrictions regarding the distribution of financial research, this report is restricted to a specific region or investor type. Get access to exclusive reports by answering the questions below.

Select your country*

Get financial insights straight to your inbox

By clicking "register" you accept the Terms and Conditions & Privacy Policy

Already on ResearchPool?

Almost there...

Are you a professional investor?

Select your country

REGISTER

Create a free ResearchPool account to access full reports, get a personalised dashboard and follow providers or companies

In order to access this report please create an account.

LOGIN

MOSL: NESTLE INDIA (Neutral)-Miss on top line-better operating margin salvages EBITDA

MOSL : NESTLÉ INDIA: EBITDA in-line; fair valuation limits upside

MOSL:NESTLÉ INDIA: Result in line; near-term margin outlook challenging

An unfavourable environment weighs on NESTLE INDIA, which sees a downgrade to Neutral

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

Create a free ResearchPool account to access full reports, get a personalised dashboard and follow providers or companies

Sign-up for free to access full reports immediately

ResearchPool Subscriptions

Get the most out of your insights

Why subscribe?

How to subscribe

ResearchPool Subscriptions

This report is only available to subscribers

Why subscribe?

How to subscribe