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Business News/ Markets / Stock Markets/  Nestle results today: Should you Buy, Sell or Hold the stock?

Nestle results today: Should you Buy, Sell or Hold the stock?

Nestle Results today: Nestle India is expected to report strong earnings performance led by margin expansion helped by declining input costs. The revenue growth though may be better than peers, nevertheless impact of weak rural demand and softer than expected festival season sales may be visible.

Nestle results today: Should you Buy, Sell or Hold the stock? (Photo: Mint)Premium
Nestle results today: Should you Buy, Sell or Hold the stock? (Photo: Mint)

Nestle India Ltd is going to report its December quarter financial performance today.  The December quarter will be fourth quarter for the company that was following January-December financial year. 

 The Consumer goods manufacturers see a weak outlook as demand has remained generally tepid during the Quarter gone by. The festival season demand was lower than the street expectations, while rural demand also has not caught pace yet.

December' 2024 quarter presents continued challenges to demand for FMCG (fast moving consumer goods) products, adversely affecting sector volume growth, said analysts at Elara Securities India Pvt Ltd in their December quarter result preview . Weak rural volume, trailing urban figures in the past year remain persistent. Further, low farm income and emergence of small regional firms are hurting large, listed companies, said analysts.

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The factors favorable for Nestle are that it has prioritized expanding its distribution networks and this as per analysts may help it post stronger revenue growth compared to many peers.

Further while the competitive intensity from small players in highly-penetrated categories such as soaps, detergents and hair oils is likely to have impact on the mass end of the portfolio. Premium products and food categories are expected to do well with urban consumption remaining stable, said analysts. Thus, HPC companies are expected to post lower growth compared to companies such as Nestle India,  as per analysts.

Analysts at Motilal Oswal Financial Services (MOFSL) expect Nestle to report sales growth of  11% YoY to 4725 crore. They expect a higher contribution from out-of-home consumption. The growth momentum will continue as company had reported growth of 9.5% in previous quarter However on sequential basis revenues are likely to be 6-7% lower.

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 The declining commodity costs are likely to benefit producers as Nestle. Analysts at MOFSL expect gross margin expansion of 190bp YoY and Ebitda margin expansion of 120bp. Ebitda stands for earnings before interest tax depreciation and amortisation.

Thus adjusted net profit as per MOFSl estimates is likely to grow 19.9% year on year to 757.8 crore during tge December quarter.

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






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Ujjval Jauhari
Ujjval Jauhari is a deputy editor at Mint, with over a decade of experience in newspapers and digital news platforms. He is skilled in storytelling, reporting, analysing and writing about stocks, investment ideas, markets, corporates and more. He is based in New Delhi.
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Published: 07 Feb 2024, 10:41 AM IST
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