Brokerages Increase Price Target for Nestle India and Maintain Ratings Following Q3 Results

Nestle India

After Nestle India Ltd. reported an operating profit of more than 20 percent for the third consecutive quarter, a number of brokerages increased their target prices for the firm while maintaining their ratings.
At 9.45 a.m. on the BSE, the stock increased by 1.5%.
Nomura boosted its target price by 16.4% to Rs 28,100 a share from the current market price, while Nuvama Research lifted its goal price to Rs 29,165 from Rs 25,810 previously. Prabhudas Lilladher raised its target price to Rs 25,471 from Rs 23,263 a share.

Due mostly to a 10% drop in export sales, Nestle’s revenue for the September 2023 quarter climbed by 9% year over year, somewhat less than the 11% predicted by Bloomberg.
As part of Nestle’s RURBAN strategy, distribution was expanded into smaller towns and rural areas, which contributed to the expansion.

Nonetheless, volume growth continued to be robust at 4%, exceeding the forecast of 3%.The gross margin increased dramatically to 56.3 percent, the greatest level in over two years.attributable to increased product pricing and decreased inflation. Staff costs, however, increased significantly by 23% year over year.

In spite of somewhat reduced revenue, EBITDA grew by 22% YoY and the EBITDA margin increased to 24.4 percent, both of which were forecasts.Except for Maggi, most major brands performed well.
The out-of-home (OOH) channel experienced robust double-digit growth as a result of infrastructure expenditures, product enhancements, and channel expansion. E-commerce sales increased.However, throughout the quarter, its percentage of overall sales decreased from 6.5 percent to 6.1 percent.

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