Nestle India is all set to report its December quarter results today. The FMCG stock has delivered 5.5 per cent return in the last one year in line with the BSE Sensex’s 5.65 per cent return. Analysts said one-off expenses in the base quarter may lift profit for the December 2022 quarter. Excluding the base quarter impact, both profit and sales are expected to grow in double digits.
Nestle India is expected to see good momentum for the quarter, with rural doing well despite an overall weakness, said Nuvama Institutional Equities. It noted that noodles and biscuits were among categories that remained resilient during the quarter.
“Following the correction in palm oil prices and softened packaging costs, gross and Ebitda margins are expected to expand sequentially as well as YoY. However, milk prices remain high, which would impact margins in dairy and confectionery products,” it said.
ICICIdirect said FMCG major may log a 12.3 per cent growth in revenue led by mix of volume & pricing growth. It noted that milk & wheat prices remained elevated, even as prices of palm oil & crude based packaging has come down in last six months. The brokerage expects a 289 bps contraction in gross margins for Nestle India on YoY basis, but 130 bps improvement sequentially.
Operating margin, ICICIdirect Securities said, is likely to witness 158 bps contraction for the quarter. Net profit is expected to grow 63.1 per cent mainly on account of one-off expense in base quarter, it said.
Adjusting one-off, net profit is likely to grow 11.2 per cent to Rs 630.60 crore, ICICIdirect said.
Motilal Oswal Securities sees profit for Nestle India rising 9.3 per cent YoY to Rs 626.70 crore. It sees sales rising 16 per cent to Rs 4,338.30 crore. Nuvama Institutional Equities sees profit at Rs 649 crore. It sees revenue at Rs 4,413 crore and Ebitda margin at 22.2 per cent.
HDFC Securities sees profit figure at Rs 650 crore, up 13.8 per cent. It is expecting a 17 per cent YoY revenue growth. It is anticipating a 100 bps sequential improvement in gross margin for Nestle India at 54 per cent while expecting margin to fall by over 300 bps YoY. It sees Ebitda growing 9.5 per cent YoY. Ebitda margin may come in at 22 per cent, the brokerage said.
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