Nestle’s beverage portfolio achieved double-digit growth, driven by strong performance of core brands like NESCAFE; which also achieved significant market share gains from ‘NESCAFE SUNRISE’. Nestle further launched ‘NESCAFÉ ROASTERY’ in the premium coffee category. In Milk Products and Nutrition category, MILKMAID posted strong growth. Additionally, Nestle a+ extended its yoghurt range with launch of low-fat Greek yoghurt. In confectioneries, consumer brand activations led to penetration gains.
NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Dolat Capital Report
Nestle India Ltd.’s Q4 FY25 revenue met our estimates, with domestic revenue growing by 4.2% YoY, although exports de-grew by 8.7% YoY. Overall, revenue increased by 10.6% on a 5-year CAGR basis.
Due to inflationary commodity prices, gross margin contracted by 60bps YoY to 56.2%. While coffee prices remained firm, cocoa prices witnessed some correction; they remain elevated overall, and milk prices have seasonally firmed up with the onset of summer. In contrast, edible oil prices have stabilized. We believe raw material prices will continue to exert pressure on gross margin in the near term.
We reduce our FY26/27E EPS estimates by 2.6/1.2% to Rs 36.4/42.0 to factor in Q4 performance and urban slowdown. Although we believe Nestle’s growth rate and profitability will remain high in the long run (given strong leadership and unique positioning in most categories), the company may also witness near-term demand and inflationary headwinds.
That being said, we maintain our ‘Reduce’ rating with a target price of Rs 2,438 (Rs 2,467 earlier) valuing the stock at 58x FY27E EPS.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
. Read more on Research Reports by NDTV Profit.Although Dolat Capital believes Nestle’s growth rate and profitability will remain high in the long run, the company may also witness near-term demand and inflationary headwinds. Read MoreResearch Reports
NDTV Profit
