Nestle India Q4 Results Review - Steady Performance; But Valuations Expensive: Motilal Oswal

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. .Motilal Oswal Report.Nestle India Ltd. reported 8% YoY revenue growth (estimate: 11%) in Q4 CY24. The company has sustained a 10% four-year revenue compound annual growth rate. Domestic sales grew 9% YoY, well supported by pricing, mix, and volume growth. Export sales dropped 5.6% YoY to Rs 1.6 billion during the quarter. Gross margin continued to expand 370 basis points YoY/210 bp QoQ to Rs 58.6% (est: 56.8%). The costs of maize, sugar, oilseeds, and spices were hit by uneven rainfall. Conversely, prices of milk, wheat, and rice remained stable. We model 57% gross margin for FY25/FY26; it rebounded after touching 54% in CY22 (CY21: 57%). Ebitda grew 13.5% YoY to Rs 11.3 billion (est: Rs 11.4 billion). Nestle’s portfolio is relatively safe form local competition; thus, operating costs have not accelerated unlike its fmcg peers. We believe the company will be able to sustain its Ebitda margin at ~25% for FY25/FY26.Nestle has been building its blocks around its RURBAN strategy and driving its distribution reach in the untapped markets. There has been a broadbased growth across brands for the last few years. Reiterate Neutral with a target price of Rs 2,400 (based on 60 times price/earning Dec-25E) due to expensive valuations..Click on the attachment to read the full report:.Nestle Q4 Results: Profit Up 4.4%, Misses Estimates.DISCLAIMERThis 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.

Nestle India Q4 Results Review - Steady Performance; But Valuations Expensive: Motilal Oswal

Domestic sales growth momentum continues

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