Nestle India Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Nestl posted sales growth of 12.3% YoY to | 2698.4 crore (I-direct estimate: | 2844.3 crore) on account of 8% domestic sales growth...

saw growth of 13.4% mainly on the back of volume growth Nestle India Ltd. (NIL) reported strong overall last one year in this segment. Company's realisation Volume growth drive Q1CY18 performance performance during Q1CY18 driven by volume led revenue growth and improved profitability on the back of favourable commodity prices and efficiency measures adopted by the management. Sales for the quarter were...

We maintain our Hold rating on Nestle with an upward revised target price of Rs 9,843 (earlier Rs 8,008). Domestic sales registered 11% YoY growth in Q1CY18 led by volume growth supported by increasing penetration and rebuild of Maggi noodles. Gross margins expanded 300bps YoY led by lower commodity prices (milk and milk solids). EBITDA grew 35% YoY driven by lower overhead costs. PAT grew 38% YoY aided by 35% YoY rise in other income. Company's venture into breakfast cereals segment with significant headroom for growth current market size at ~$360mn and expected to grow at a CAGR of 16% over the next 5 years augurs well. Softer input prices and cost efficiencies are expected to drive margin expansion and strong earnings growth...

Thrust on Volume to Drive Growth Further: Nestle India's Revenue grew by 10.6% YoY, led by volume growth and increased product penetration. EBITDA margin expansion of 449bps was favorably impacted by lower commodity prices, particularly milk and milk solids and a considerable reduction in employee cost.

Revenue grew by 5.68% to Rs. 2736.84 Cr in Q1CY18 when compared to the previous quarter. Nestle India Ltd Q1CY18 results Comment

Sales for the quarter were up 6.4% YoY to | 2757.2 crore (I-direct estimate: | 2854.8 crore) led by 6.3% domestic sales growth. However, on a comparable basis, domestic sales saw growth of 13.4% mainly on the back of volume growth across segments as NIL launched many variants in the last one year in this segment Operating profit increased 34% to | 704.9 crore (I direct estimate: | 633.7 crore) while margins witnessed an improvement of 531 bps to 25.6% mainly on the back of lower material costs,...

Sales growth remains subdued: Net sales rose 10.5% YoY to INR27.4b (est. of INR27.7b). Adjusted for GST accounting, sales growth was 13.4%, according to NEST's press release. Growth momentum witnessed in 4QCY17 (15.6%...

Nestle reported a robust quarter with EBITDA and net profit growth of 35% and 40%, respectively, which was ahead of our expectations by 7%. Comparable sales grew by 13% to Rs27.5bn, in line with expectations. However, operating margin witnessed strong improvement of 440bps, led by lower input costs and cost savings....

Nestle India's recovery is gaining momentum, with recent growth outperforming peers, driven by new CEO's strategy to focus on volume-led growth, drive a faster pace of innovation and expand distribution. With a revitalised core portfolio and increased focus on growth, we believe that Nestle's...

Increased Earnings Visibility Warrants a Rating Upgrade Nestle India has posted an impressive set of numbers for 4QCY17. Its reported net sales grew by 15.6% YoY to Rs25.9bn with domestic business growing by 15.8% YoY and exports by 12.7% YoY. EBITDA surged by 28.3% YoY to Rs6.1bn, aided by lower input cost and other cost-rationalisation measures. While reported net profit increased by 60% YoY to Rs3.1bn, adjusted net profit excluding provisioning for contingencies grew by 37.6% YoY to Rs3.9bn. We expect Nestle to report revenue and earnings CAGR of 13.9% and 16.8%, respectively through CY17-19E. Based on expected adjusted EPS of Rs191, the stock currently trades at 39.7x CY19E...