Emkay Global 's report on Nestle
“Nestle Q4CY14 reported steady performance with marginal miss on revenues and in-line PAT performance. Key highlights are: (1) Revenue growth of 12% yoy to Rs 25.2bn with domestic revenues growing at 11% yoy to Rs 23.6bn, while exports grew at strong 18% yoy; (2) EBITDA at Rs 5.4bn up 18% yoy led by lower input cost & prudent expenses management. (3) Gross margin improved 200bps yoy to 55.4%, with EBITDA margins improving 120bps yoy to 21.6%. (3) Lower yields impacted other income, which declined 23% yoy to Rs 326mn. (4) Zero finance costs due to debt pay-off resulted in APAT growth of 21% yoy to Rs 3.3bn.”
“Domestic revenues grew 11% to Rs 23.6bn, with underlying volume growth in the range of 2- 3% yoy and better realization. Innovations in prepared dishes segment, especially Maggi Oats noodles, Atta noodles, Masala-ae-Magic seem to have improved volume trajectory. Export business saw good traction and grew by 18% to Rs 1.6bn driven by export of milk and nutrition products to Bangladesh.”
“Results remained on expected lines led by some volume uptick and gross margin expansion. With likely improvement in urban & discretionary demand, expect Nestle’s portfolio to report higher growth, while lower inputs & better mix should drive margin and earnings. No capex & tight working capital should ensure sustained and strong free cash flows in coming years and subsequently higher payouts. Continues to trade at attractive FCF yield of 3.3% on CY16E. We maintain Accumulate with a revised target price of Rs 7500/Share (3% CY16E FCF yield)”, says Emkay Global Financial Services’ research report.
For all recommendations, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Read More
