Shares of Nestle India rose 1% to Rs 2,530 in Thursday\’s intraday trade on BSE ahead of the company\’s fourth-quarter results due later in the day.
FMCG major is expected to report a 17% jump in its net profit to Rs 867 crore for the quarter ended March 31, 2024, according to average estimates of three brokerages. The gains will be on account of benign raw material prices, price hikes and new product development (NPD) among other things.
Profit after tax (PAT) estimated by Axis Securities, Sharekhan and HDFC Securities are in the range of Rs 892 crore and Rs 840 crore.
On the revenue front, the company will likely report growth of 7.2% for the reporting quarter at Rs 5,174 crore. Sharekhan\’s revenue estimates remain highest in the pack at Rs 5,236 crore for the reporting quarter while HDFC Securities\’ Rs 5,090 crore remains the lowest.
The company had reported revenue of Rs 4,864.2 crore in the March quarter of FY23 while PAT was recorded at Rs 736.6 crore in the said period.
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At 11:57 am, the stock was trading 0.7% higher at Rs 2,520 on BSE. Over the past year, the stock has gained 22%. However, it has declined by 8% on a year-to-date (YTD) basis.
Here’s what brokerages are pencilling in for Nestle India’s quarterly show:
Axis Securities
Axis Securities expects Nestle\’s revenue to go up by 8% YoY to Rs 5,197 crore led by price hikes, rural-led distribution expansion and NPD. On a sequential basis, a 13.4% uptick is expected over Rs 4,584 crore reported in the October-December quarter.
The profit after tax (PAT) is expected to surge by Rs 21.1% on the YoY basis to Rs 892 crore versus Rs 737 crore in the year-ago period. EBITDA margin is seen to expand by 237 bps YoY to 25.2% in the reporting quarter versus 22.8% in the corresponding period of the previous financial year.
The key monitorables will be the demand outlook on rural versus urban business, competitive intensity and raw material price trends.
Nuvama
Nuvama anticipates Q4FY24 demand trends to be similar to Q3FY24 with rural slowdown still persisting for the FMCG pack. The growth will be led by urban markets and continue to drive growth led by demand for premium products. Nestle remains among its top picks with gradual recovery for FMCG companies to likely come in the second half of FY25.
HDFC Securities
HDFC Securities has estimated Nestlé India’s net profit at Rs 5,090 crore for the January-March quarter, which will be a 10.6% QoQ growth and a 5.3% uptick on the YoY basis. The company will likely report its adjusted PAT at Rs 840 crore, which will be an 11.8% QoQ and 12.4% YoY growth.
The key monitorables will be commentary on recovery in trade channels and rural demand according to HDFC Securities. New product pipeline and demand trends in packaged foods should also be tracked.
Sharekhan
Nestlé India is expected to report net sales of Rs 5,236 for the March ended quarter, which will be 8.4% growth over Rs 4,831 crore reported in the corresponding period of the last financial year. Sharekhan sees India business to likely report 9% Y-o-Y growth while international business declining by 5% Y-o-Y.
The adjusted PAT will likely be at Rs 870 crore versus Rs 737 crore in the year-ago period. The YoY gains will be around 18%.
The operating margin is estimated at 24.3%, up by 161 bps versus 22.7% in Q4FY23 largely due to softening in raw material prices.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
