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Dolat Capital Report
Nestle India Ltd.’s Q4 CY22 Ebitda came inline but revenue and adjusted profit after tax missed our estimates. The company reported 13.8% YoY growth in the domestic market driven by healthy volume and mix led growth while exports business posted 17.1% YoY increase.
On a three-year compound annual growth basis, revenues increased by 10.6% - indicates acceleration in overall growth. E-com channel posted strong 46% growth fueled by new formats - ‘quick commerce’ and ‘click and mortar’. E-com grew 41% in CY22 contributing 6.5% in domestic sales.
Gross margin decline by 210 basis points YoY mainly attributed to higher inflation related to cereals, grains and coffee. While edible oil, crude oil and packaging costs witnessed softening by the end of the quarter, milk is expected to remain firm due to lumpy skin disease in H2 CY22.
Though revenue and adjusted profit after tax performance during Q3 was below our estimate, we have broadly maintained CY23/24E earnings per share estimates as we believe that the demand for Nestle’s products would improve with the improvement in the economic uptrend.
As the company has leadership position and unique positioning in most of the categories, we believe that it’s growth rate would remain high. Further, Nestle’s margins would improve gradually with softening in commodity prices.
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More Research Reports On Nestle India's Q4 CY22 Results Review
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