Share Market Live

NSE

Nestle India shares slid into negative territory on Thursday after the FMCG major's quarterly net profit and revenue fell short of Street estimates.The Nestle stock finished the day down 0.9 percent lower at Rs 18,090 apiece on BSE after the earnings announcement, having stayed above the flatline for much of the session earlier in the day.

In the first half of the day, Nestle shares rose to as high as Rs 18,572, up 1.8 percent from their previous close.

The food and beverage company posted a 20 percent year-on-year fall in net profit to Rs 386.6 crore for the October-December period and reported a one-time loss of Rs 236.5 crore. Its revenue for the quarter ended December 2021 increased 8.9 percent on year to Rs 3,739.3 crore, according to a regulatory filing.

Both net profit and revenue were below Street estimates. However, the company beat expectations on the EBITDA front.

The FMCG company's board declared a dividend of Rs 65 per share.

Deven Choksey of KRChoksey said given the current environment, Nestle India "is a star performer across the entire group... The margin, in particular, that it earns from the India business is significantly higher compared to many other geographies where it operates. The company has been very systematically rejigging its product portfolios."

However, he said Nestle's valuation has never been cheap.

Kaustubh Pawaskar, AVP Fundamental Research at Sharekhan, said the company's Q4 numbers were good on the operating profit front. "If you exclude the one-time exceptional hit, the company's profit was better than what we were anticipating. Overall a decent set of numbers in the current environment," he said.

Pawaskar said Nestle is less likely to be impacted compared to other FMCG companies in two aspects: rural slowdown and raw material or input cost inflation. He is positive on Nestle's top-line growth prospects in the coming quarters and has a target price of Rs 22,395 on the stock.

Any correction is a quality stock such as Nestle is a good entry point, he added.

Nestle shares have risen 8.5 percent in the past year, as against the Nifty50's 13.9 return, and the Nifty FMCG's 9.2 percent.

Catch latest stock market updates with CNBCTV18.com's blog

(Edited by : Akanksha Upadhyay)

First Published:Feb 17, 2022 3:27 PM IST