FMCG major Nestlé India is expected to report a 17% jump in its net profit to Rs 867 crore for the quarter ended March 31, 2024, according to average estimates of three brokerages. The gains will be on account of benign raw material prices, price hikes and new product development (NPD) among other things.
Profit after tax (PAT) estimated by Axis Securities, Sharekhan and HDFC Securities are in the range of Rs 892 crore and Rs 840 crore.
On the revenue front, the company will likely report growth of 7.2% for the reporting quarter at Rs 5,174 crore. Sharekhan's revenue estimates remain highest in the pack at Rs 5,236 crore for the reporting quarter while HDFC Securities' Rs 5,090 crore remains the lowest.
The company had reported revenue of Rs 4,864.2 crore in the March quarter of FY23 while PAT was recorded at Rs 736.6 crore in the said period.
The quarterly earnings will be announced on April 25, Thursday.
The company had earlier informed the exchanges about changing the financial year from “1st January - 31st December” cycle to “1st April - 31st March” cycle. Accordingly, the current financial year of the company stands extended up to March 31, 2024, covering a period of 15 months commencing from January 1, 2023, to March 31 2024, comprising five quarters.
Here is what these brokerages said:
Axis Securities
Axis securities expects Nestle's revenue to go up by 8% YoY to Rs 5,197 crore led by price hikes, rural led distribution expansion and NPD. On the sequential basis, a 13.4% uptick is expected over Rs 4,584 crore reported in the October-December quarter.
The profit after tax (PAT) is expected to surge by Rs 21.1% on the YoY basis to Rs 892 crore versus Rs 737 crore in the year-ago period. On the QoQ basis, it will likely be up by 36% over Rs 656 crore in Q32FY24.
The earnings before interest, taxes, depreciation and amortisation (EBITDA) for the reporting quarter is seen at Rs 1,307 crore, which will be a 19.3% YoY and QoQ growth.
EBITDA margin is seen to expand by 237 bps YoY to 25.2% in the reporting quarter versus 22.8% in the corresponding period of the previous financial year. The margin expansion is on account of deflation in palm oil and milk prices, price hikes and operating leverage.
The key monitorables will be the demand outlook on rural versus urban business, competitive intensity and raw material price trends.
Sharekhan
Nestlé India is expected to report net sales of Rs 5,236 for the March ended quarter, which will be 8.4% growth over Rs 4,831 crore reported in the corresponding period of the last financial year. Sharekhan sees India business to likely report 9% Y-o-Y growth while international business declining by 5% Y-o-Y.
The adjusted PAT will likely be at Rs 870 crore versus Rs 737 crore in the year-ago period. The YoY gains will be around 18%.
The operating margin is estimated at 24.3%, up by 161 bps versus 22.7% in Q4FY23 largely due to softening in raw material prices.
HDFC Securities
HDFC Securities has estimated Nestlé India’s net profit at Rs 5,090 crore for the January-March quarter, which will be a 10.6% QoQ growth and 5.3% uptick on the YoY basis. The company will likely report its adjusted PAT at Rs 840 crore, which will be an 11.8% QoQ and 12.4% YoY growth.
At Rs 1,250 crore, the EBITDA for the reporting quarter will be 10.8% higher from Q3FY24 and 11.2% jump over Q4FY23. The EBITDA margin will be at 24.6%, up by 4 bps from Q3FY24 and 131 bps from Q4FY23.
The key monitorables will be commentary on recovery in trade channels and rural demand according to HDFC Securities. New product pipeline and demand trends in packaged foods should also be tracked.
Nuvama
Nuvama anticipates Q4FY24 demand trends to be similar to Q3FY24 with rural slowdown still persisting for the FMCG pack. The growth will be led by urban markets and continue to drive growth led by demand for premium products. Nestle remains among its top picks with gradual recovery for FMCG companies to likely come in the second half of FY25.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Profit after tax (PAT) estimated by Axis Securities, Sharekhan and HDFC Securities are in the range of Rs 892 crore and Rs 840 crore.
On the revenue front, the company will likely report growth of 7.2% for the reporting quarter at Rs 5,174 crore. Sharekhan's revenue estimates remain highest in the pack at Rs 5,236 crore for the reporting quarter while HDFC Securities' Rs 5,090 crore remains the lowest.
The company had reported revenue of Rs 4,864.2 crore in the March quarter of FY23 while PAT was recorded at Rs 736.6 crore in the said period.
The quarterly earnings will be announced on April 25, Thursday.
The company had earlier informed the exchanges about changing the financial year from “1st January - 31st December” cycle to “1st April - 31st March” cycle. Accordingly, the current financial year of the company stands extended up to March 31, 2024, covering a period of 15 months commencing from January 1, 2023, to March 31 2024, comprising five quarters.
Here is what these brokerages said:
Axis Securities
Axis securities expects Nestle's revenue to go up by 8% YoY to Rs 5,197 crore led by price hikes, rural led distribution expansion and NPD. On the sequential basis, a 13.4% uptick is expected over Rs 4,584 crore reported in the October-December quarter.
The profit after tax (PAT) is expected to surge by Rs 21.1% on the YoY basis to Rs 892 crore versus Rs 737 crore in the year-ago period. On the QoQ basis, it will likely be up by 36% over Rs 656 crore in Q32FY24.
The earnings before interest, taxes, depreciation and amortisation (EBITDA) for the reporting quarter is seen at Rs 1,307 crore, which will be a 19.3% YoY and QoQ growth.
EBITDA margin is seen to expand by 237 bps YoY to 25.2% in the reporting quarter versus 22.8% in the corresponding period of the previous financial year. The margin expansion is on account of deflation in palm oil and milk prices, price hikes and operating leverage.
The key monitorables will be the demand outlook on rural versus urban business, competitive intensity and raw material price trends.
Sharekhan
Nestlé India is expected to report net sales of Rs 5,236 for the March ended quarter, which will be 8.4% growth over Rs 4,831 crore reported in the corresponding period of the last financial year. Sharekhan sees India business to likely report 9% Y-o-Y growth while international business declining by 5% Y-o-Y.
The adjusted PAT will likely be at Rs 870 crore versus Rs 737 crore in the year-ago period. The YoY gains will be around 18%.
The operating margin is estimated at 24.3%, up by 161 bps versus 22.7% in Q4FY23 largely due to softening in raw material prices.
HDFC Securities
HDFC Securities has estimated Nestlé India’s net profit at Rs 5,090 crore for the January-March quarter, which will be a 10.6% QoQ growth and 5.3% uptick on the YoY basis. The company will likely report its adjusted PAT at Rs 840 crore, which will be an 11.8% QoQ and 12.4% YoY growth.
At Rs 1,250 crore, the EBITDA for the reporting quarter will be 10.8% higher from Q3FY24 and 11.2% jump over Q4FY23. The EBITDA margin will be at 24.6%, up by 4 bps from Q3FY24 and 131 bps from Q4FY23.
The key monitorables will be commentary on recovery in trade channels and rural demand according to HDFC Securities. New product pipeline and demand trends in packaged foods should also be tracked.
Nuvama
Nuvama anticipates Q4FY24 demand trends to be similar to Q3FY24 with rural slowdown still persisting for the FMCG pack. The growth will be led by urban markets and continue to drive growth led by demand for premium products. Nestle remains among its top picks with gradual recovery for FMCG companies to likely come in the second half of FY25.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
