Result Analysis: Nestle India Ltd. (CMP: Rs.19,009) | Result Update: Q4FY22 |
Nestle India is one of the biggest players in FMCG segment is primarily involved in Food business which incorporates product groups viz. Milk Products and Nutrition, Prepared Dishes and Cooking Aids, Powdered and Liquid Beverages and Confectionery. The company manufactures products under brand names such as Nescafe, Maggie, Milkybar, Kit-Kat, Bar-One and Nestea. It has presence across India with 9 manufacturing facilities and four branches spread across the region.
Stock Details | |
Market Cap. (Cr.) | 183276 |
Equity (Cr.) | 96.42 |
Face Value | 10 |
52 Wk. high/low | 21053 / 16000 |
BSE Code | 500790 |
NSE Code | NESTLEIND |
Book Value (Rs) | 255.06 |
Sector | FMCG |
Key Ratios | |
Debt-equity: | 0.1 |
ROCE (%): | 55.52 |
ROE (%): | 104.53 |
TTM EPS: | 243.25 |
P/BV: | 74.5 |
TTM P/E: | 80.66 |
Result Highlights:
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Nestle India has delivered strong results in Q4FY22 by laying a 22.8% YoY increase in the revenue from operations to Rs.4,257 cr. and huge increase of 74% in the Net profits to Rs.628 cr.
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Company’s domestic sales rose by 22.5% YoY in the quarter led by volume and mix growth. Export Sales rose by 40.3% YoY in the December quarter.
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Total cost of the materials rose by 17.4% YoY due to the increase in inflation. Finance cost and Net provisions reduced significantly in the quarter by ~15% and 142% respectively compared to the previous year same quarter.
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EBITDA of the Nestle grew by 18% YoY while EBITDA margin decreased marginally by 10 bps YoY to 24% in the quarter.
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In 2022, Nestle India has acquired PURINA Petcare business that delivers nutrition to pets and also launched globally renowned GERBER cereals catering to the nutrition needs of toddlers.
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The management of the company declared final dividend of Rs.75 per equity share in the quarter and For the FY22 it has given dividend of Rs.220 per equity share.
Financial Performance:
Shareholding Pattern:
Particulars | % |
Promoters & Promoter Group | 62.77 |
FIIs | 13.03 |
DIIs | 9.06 |
Public | 13.41 |
Others | 1.73 |
Managerial commentary:
Commenting on the results, Mr. Suresh Narayanan, Chairman and Managing Director, Nestlé India said, I am delighted to share that we delivered our highest double‐digit growth in a decade led by sustained volume and mix led growth, leading to a strong value growth. In 2022 total sales grew by 14.5% and domestic sales increased by 14.8%, with broad based performance across all categories. Our robust performance on e‐commerce continued, fuelled by Quick Commerce and Click & Mortar. Out‐Of‐Home (OOH) business made a strong comeback in 2022, recovering its pre‐covid base and delivering robust growth by revamping, resetting geography, channel and sales priority. We launched our first ever ‘direct to consumer’ (D2C) platform – www.mynestle.in where products manufactured by the Company in India are available in Delhi– NCR.
Outlook:
Nestle India reported resilient all-round performance in Q4FY22 with led by strong double-digit growth across all categories, primarily led by price growth.Domestic as well as exports sales grew by healthy percentage compared to last year. The management stated, its Rurban strategy is fueling the overall growth despite rural market is showing a slowdown. Present inflation would take some time to settle down and would help the company in expanding the margins in the coming period. Nestle has delivered the earnings of Rs.247.9 in the FY22 and the PE of the company stands at 77x on the current price.
Results:
Particulars (In Rs. Cr.) | Q4FY22 | Q3FY22 | Q4FY21 | QoQ% | YoY% | FY22 | FY21 |
Domestic Sales | 4,062 | 4,372 | 3,568 | -7.1% | 22.5% | 16,098 | 14,025 |
Export Sales | 171 | 205 | 146 | -16.6% | 40.3% | 692 | 640 |
Other Operating Revenue | 24 | 24 | 33 | -3.6% | -26.3% | 107 | 76 |
Revenue From Operations | 4,257 | 4,602 | 3,748 | -7.5% | 22.8% | 16,897 | 14,741 |
Other Income | 30 | 31 | 27 | -3.6% | 12.0% | 101 | 120 |
Total Income | 4,286 | 4,632 | 3,775 | -7.5% | 22.7% | 16,998 | 14,861 |
Cost of materials consumed | 2,006 | 1,953 | 1,663 | 2.7% | 17.4% | 7,652 | 6,154 |
Purchase of stock-in trade | 95 | 80 | 68 | 19.0% | 17.4% | 348 | 262 |
Changes in inventories | -180 | 145 | -116 | -223.6% | -224.8% | -250 | -68 |
Employee expense | 407 | 420 | 389 | -3.1% | 8.0% | 1,635 | 1,530 |
Other Expense | 934 | 978 | 876 | -4.6% | 11.7% | 3,697 | 3,266 |
Impairment Loss on Property, Plant & Equipment | 13 | – | – | – | – | 29 | 1 |
EBITDA | 981 | 1,026 | 868 | -4.3% | 18.1% | 3,785 | 3,595 |
EBITDA Margin (%) | 24.2% | 23.5% | 24.3% | 70 bps | -10 bps | 23.5% | 25.6% |
Finance Cost | 45 | 37 | 44 | 20.5% | -14.7% | 155 | 202 |
Depreciation & Amortisation expense | 99 | 98 | 106 | 0.5% | -7.4% | 403 | 391 |
Net Provisions for Contingencies | -9.53 | 6 | -14 | -259.6% | -142.0% | 16 | -25 |
Corporate Social Responsibility Expense | 18 | 16 | 24 | 13.5% | -34.7% | 56 | 53 |
Exceptional Items | – | – | 237 | – | – | – | 237 |
Profit Before Tax | 859 | 899 | 500 | -4.5% | 79.9% | 3,256 | 2,857 |
Tax | 231 | 238 | 121 | -2.9% | 97.4% | 865 | 739 |
Profit After Tax | 628 | 661 | 379 | -5.0% | 74.3% | 2391 | 2118 |
PAT Margin (%) | 14.8% | 14.4% | 10.1% | 40 bps | 470 bps | 14.1% | 14.4% |
EPS (in Rs.) | 65.14 | 68.61 | 39.36 | -5.1% | 74.3% | 247.94 | 219.72 |
Source: Company website, EWL Research
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