Mehabe score: 2 G Factor: 4 Piotski Score: 6 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 6.
Description
Nestle India Limited is a subsidiary of Nestle which is a Swiss MNC. The company operates in the Food segment. Site:NESTLEIND Main Symbol:NESTLEIND
Stock trades at 18259.0, above its 50dma 18020.76. However it is trading below its 200dma 18328.85. The stock remains weak though short term bullish momentum supports price action. It needs to close above 18328.85 for bullish price action to continue
The 52 week high is at 20609.15 and the 52week low is at 16255.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 93.46%
– has been maintaining a healthy dividend payout of 116.68%
Weakness
– Stock is trading at 84.53 times its book value
-The company has delivered a poor sales growth of 9.98% over past five years.
Competition
– The industry trades at a mean P/E of 56.0x. Nestle India trades at the industry’s max P/E of 75.98x. NESTLEIND trades at a P/E of 75.9x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 6.0. NESTLEIND has a G-Factor of 4 and Piotski scoreof 6.
– Average 1 month return for industry is 4.7%. The max 1- month return was given by Nestle India: a return of 4.85 %
Quarterly Results
Sales for period ended Mar 2022 is Rs 3981.0 cr compared to Rs 3611.0 cr for period ended Mar 2021, a rise of 10.2% .
vis-vis 930.0 for period ended Mar 2021 .
Operating Margins contracted -251.9 bps for period ended Mar 2022 vis-vis Mar 2021.
Company reported operating profit of Rs 925.0 cr for period ended Mar 2022 and operating profit margin at 23.2 % for same period.
The EPS for quarter ended Mar 2022 is Rs 61.68 compared to Rs 40.1 for previous quarter ended Dec 2021 and Rs 62.46 for Mar 2021.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 15079.0 cr for period ended TTM vis-vis sales of Rs 14709.0 cr for the period ended Dec 2021, a growth of 2.5%. The 3 year sales cagr stood at 6.8%.
Net Profit reported at Rs 2137.0 cr for period ended TTM vis-vis sales of Rs 2145.0 cr for the period ended Dec 2021, falling 0.4%.
Company recorded a Net Profit CAGR of 2.8% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 113.0% compared to 93.0% over the last 3 Years. – The stock has given a return of 7% on a 1 Year basis vis-vis a return of 19% over the last 3 Years. – The compounded sales growth on a TTM bassis is 11% vis-vis a compounded sales growth of 9% over the last 3 Years. – The compounded profit growth on a TTM basis is 7% vis-vis a compounded profit growth of 13% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2022 fii holding stood at 12.01% vis-vis 12.35% for Dec 2021 – Public shareholding has remained largely constant. The Mar 2022 public holding stood at 16.62% vis-vis 16.99% for Dec 2021
Conclusion
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 93.46%
– has been maintaining a healthy dividend payout of 116.68% – Stock is trading at 84.53 times its book value
-The company has delivered a poor sales growth of 9.98% over past five years.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 18020.76 and is trading at 18259.0, thus bullish price action wise.
