New Research Reports

For Q4FY24, TATACONS’ revenue was a miss due to lower growth in international tea and India beverages. EBITDA margin performance ((+189 bps YoY/ +99 bps QoQ) was the bright star aided by improved international profitability.

It's surprising that organisational learning missed in just 15 years (HUL had volume decline of 4.2% in MQ'2009 thanks to delay in price cuts in Detergents). It's history repeating and not just rhyming.

Positively, low cocoa content in Nestle products (~5% vs ~20% in peers) provides market share gain opportunity in the chocolate category (Nestle has higher revenue salience in wafer segment).

Nestle India (NEST) reported 9% YoY revenue growth (est. 8.5%) during the
quarter ended Mar’24. The company has achieved 12% revenue CAGR over a
five-year period (CY18-FY24). Domestic sales grew 9% YoY, well supported by
pricing, mix, and volume growth. Export sales rose 19% YoY to INR2.3b for the
quarter

Our REDUCE call on Nestlé is a factor of valuations (62x P/E for FY26) pricingin the positive outlook. Capacity augmentation (Rs64bn capex spends over
CY20-25), a wider parent portfolio (gaining relevance in the Indian context),
and thrust on rural, all bolster the fundamentals

Strong growth witnessed across geographies driven by sustained growth in domestic markets and healthy double-digit growth in exports

Recommendation With an 11% upside from the CMP, we maintain our long-term BUY rating on the stock.