Higher volumes and price-led growth, coupled with operating leverage benefits are likely to help Nestle India report a healthy double-digit growth in earnings for the quarter ended December 2023.

The company’s net profit for the quarter is seen rising 18% year-on-year (YoY) to Rs 745 crore, according to the average of estimates given by eight brokerage firms. Revenue is seen rising 10.3% to Rs 4,697 crore and the operating profit by 15.3% to Rs 1,126 crore.

Sequentially, however, the earnings will be weak, with the net profit likely to drop by nearly 8%, weighed down by a 7% fall in revenue and an 8.4% decline in operating profit.

The Maggi noodles maker is slated to release its fourth-quarter earnings on Wednesday. The company follows a calendar year.

Here’s summarising the broad expectations of analysts from the packaged foods maker:


Low teen revenue growth to continue owing to distribution expansion initiatives, and steady volume growth in the chocolates and nutrition segment, partially offset via weakness in LUP of the prepared dishes segment.

Improvement in gross margin owing to moderation in raw material index, and favorable product mix. The benefits of operating leverage shall flow in at the EBITDA level.

Motilal Oswal Securities

We expect sales growth of 11% YoY and the growth momentum will continue. We expect a higher contribution from out-of-home consumption. Expect gross margin expansion of 190 bps YoY and EBITDA margin expansion of 120 bps. Will watch out for commentaries on demand and material cost trajectory.

Kotak Institutional Equities

Nestle India is well-placed to deliver strong revenue growth (9.7% YoY) in the FMCG pack, led by 7.0%/2.7% volume/pricing growth (base quarter volumes were impacted by the steep price increase in Maggi LUP). We model 10.1%/1.5% YoY growth in domestic/export revenues.

We expect gross margin to be broadly flat sequentially (10 bps QoQ) at 56.6% (170 bps YoY), partly aided by deflation in edible oils, wheat, packaging, and dairy prices.

We expect EBITDA margin at 23.8% ((-)65/+80 bps QoQ/YoY), as increased A&P spending offset gross margin expansion.

Equirus Capital

Nestle is likely to register 11% YoY topline growth, driven by pricing and volumes. The urban nature of the portfolio has helped in better absorption of price hikes. Moreover, distribution expansion in rural markets will continue to aid growth for Nestle. Favorable raw material prices would aid 80 bps YoY operating margin expansion.

Nuvama Institutional Equities

We expect revenue/EBITDA/PAT to grow 10%/14%/19% YoY. Volume growth is likely to be 6% YoY. Nestle shall be less affected by a rural slowdown due to proactive steps and low salience in rural compared to others.

EBITDA margins are anticipated to expand 100 bps YoY to 23.8%, driven by lower milk costs.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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