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Business News/ Markets / Stock Markets/  Nestle India share price rises 4%, hits fresh record high after Q3 earnings; here's what experts say
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Nestle India share price rises 4%, hits fresh record high after Q3 earnings; here's what experts say

Nestle India share price climbed over 4 per cent to hit its fresh record high in intraday trade on BSE on Thursday, October 19 after the company reported its September quarter (Q3CY23) scorecard.

Nestle's revenue in Q3CY23 increased 9.5 per cent to ₹5,036.8 crore from ₹4,601.8 crore in the year-ago period. (Pixabay)Premium
Nestle's revenue in Q3CY23 increased 9.5 per cent to 5,036.8 crore from 4,601.8 crore in the year-ago period. (Pixabay)

Nestle India share price climbed over 4 per cent to hit its fresh record high in intraday trade on BSE on Thursday, October 19 after the company reported its September quarter (Q3CY23) scorecard. Nestle share price opened at 23,279.90 against the previous close of 23,269.65 and rose about 4.12 per cent to hit its all-time high of 24,228.75 on BSE. The stock finally closed 3.66 per cent higher at 24,122.

During market hours on Thursday, Nestle India reported a net profit of 908 crore in the quarter ended September 2023, registering a growth of 37.27 per cent from 661.46 crore in the same quarter last year. The net profit for the quarter includes a one-time gain of 106.4 crore.

The company's revenue in Q3CY23 increased 9.5 per cent to 5,036.8 crore from 4,601.8 crore in the year-ago period.

EBITDA in the July-September quarter rose 21.3 per cent to 1,225 crore from 1,009.6 crore, YoY. EBITDA margin decreased by 220 basis points (bps) to 24.3 per cent from 22.1 per cent, YoY.

Read More: Nestle India Q3 Results: Net profit rises 37% YoY; board approves 140 dividend; 1:10 stock split

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Besides, the board of directors of Nestle India declared a second interim dividend payout.

"The board of directors have declared a second interim dividend for 2023 of 140 per equity share (face value 10 per equity share) amounting to 1,349.82 crore, which will be paid on and from November 16, 2023. This is in addition to the first interim dividend of 27 per equity share paid on May 8, 2023," said Nestle in an exchange filing on Thursday.

In addition, the board approved the subdivision of shares, or the split of existing equity shares with a face value of 10 each that are fully paid up, into ten (10) equity shares with a face value of Re 1 each that are fully paid up, subject to the consent of company members.

Also Read: Nestle Q3 results: Approves stock split in 1:10 ratio, declared dividend

Experts largely positive about Nestle post-Q2 results

Amnish Aggarwal, Head of Research at Prabhudas Lilladher Pvt Ltd has an 'accumulate' view on the stock.

"Nestle reported a strong set of numbers in the current context (low-single-digit growth numbers expectations from the sector). We estimate low single-digit volume growth. We expect firm commodity prices in coming quarters which will check any meaningful margin expansion from high levels of 3Q23. Nestle remains a preferred pick given its strong volume growth visibility as it is under-indexed in small towns and rural India," said Aggarwal.

Anushi Vakharia, a research analyst at StoxBox pointed out that a double-digit growth in milk products and nutrition brands aided Nestle India's revenue growth in the September quarter. Besides, KitKat uplifted the confectionery business performance while consistent market share gains in Nescafe added to the overall robust performance.

Additionally, a higher focus on a more premium mix (mega launch plans for KitKat’s premium portfolio) and falling commodity prices in multiple categories aided in a higher-than-anticipated margin expansion.

"While a good flush season ahead is expected to keep the milk prices stable, we would keenly track the management’s commentary on the effect of volatile coffee prices and the impact of uneven rainfall on the business performance for the upcoming quarters. Looking ahead, we continue to remain optimistic about the volume-driven growth plans of the business as it penetrates deeper into the rural areas through its RURBAN strategy and implemented through initiatives like the customer ordering app - NESmitra," said Vakharia.

 

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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 19 Oct 2023, 12:32 PM IST
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