Nestle India Ltd. share price target

Nestle India Analyst Meet highlighted its strategy to sustain double digit volume led growth led by focus on 1) Innovation and Renovation in existing segments 2) distribution expansion across channels. NEST achieved 6.2% volume growth in 3Q (8.2% and -0.3% in 1Q and 2Q) and 5% in 9mCY20 even as Rural growth is currently 2x urban growth at ~12%. NEST plans to invest behind emerging categories like breakfast cereals (Nesplus), Milo (MFD), Nescafe RTD and Nutraceuticals (Resource and Optifast) and3). We believe renewed thrust on Maggi (3Q growth at 19.1%) is...

The company's total sales and domestic sales both increased by 10.2% driven by volume and mix. Export sales increased by 9.4%. Demand in out of home channel improved through the quarter but continues to be impacted by COVID....

Nestle India (NEST) reported a perfectly in-line performance across key metrics for Q3CY20. Reported Revenue grew 10.2% YoY at Rs. 3,525cr in line with our estimate of Rs. 3,520cr. Domestic sales reported 10.2% driven by 7% volume and 3.2% price/mix led growth as per our estimates.

Nestl's Q3CY20 results beat our estimates on all counts with 10% volume and mix growth in the domestic market. In-house consumption brands witnessed double digit growth supported by improved supply situation. However, out of home categories continues to remain impacted due to pandemic fears. E-com business (4% contribution) witnessed strong acceleration with 97% growth. Exports increased 9.4% YoY. We have revised our CY20E, CY21E and CY22E EPS estimates at Rs 223...

Nestle India (NEST) 3QCY20 result was above our estimates. Revenue came back to strong double digit growth at 10%YoY (vs 2% in 2QCY20) driven by rise in at-home consumption. Out-of-home consumption also picks-up but remain below pre-covid levels. Operating profit margins improved led by deflationary raw material and cost rationalization. Positively, NEST has turned aggressive as the management guides for Rs 26bn capex (equivalent to total capex done over last 8-9 years). We have marginally trimmed our estimates downwards adjusting for lower yield on other income and higher depreciation due to accelerated capex. We value the company at 55x CY22E EPS. Our...

Commits to invest Rs 26bn in India over next 3-4 years We are upgrading NEST to HOLD from reduce given 1) resilient performance 2) growth visibility given Rs26bn investment program 3) sustained performance in key brands like Maggi, Kitkat, Munch, Nescafe 4) 80%...

Boosted by in-house demand, brands like Maggi Noodles & Sauces, Kit Kat, Munch, Nescafe Classic and Sunrise registered double-digit growth in Q3CY2020. Rising in-house consumption, sustained new launches and expansion in...

Nestle is well positioned to capture the immense growth opportunity given its market leadership, consumer loyalty and trust, lower penetration, healthy cash flow generation, growing demand for packaged / instant food given tailwinds from rising in-home consumption. We initiate coverage with BUY