Nestle India shares drop 2% after Q4 results. Buy, sell or hold?

economictimes.indiatimes.com:

Nestle India’s share price fell on Friday to the day’s low of Rs 2,511.60, dropping 2% after the company declared its Q4 results on Thursday. The standalone net profit rose 27% year-on-year (YoY) to Rs 934 crore for the March quarter as compared to Rs 737 crore a year ago.

Revenue rose 9% to Rs 5,268 crore, up from Rs 4,831 crore, the FMCG major said in a regulatory filing.

The company has also 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’s what brokerages have to say about the stock performance:

Goldman Sachs

Goldman Sachs sees the March quarter as a strong one driven by margin expansion. They believe that gross margins may not sustain as input cost inflation is increasing. Nestle could benefit from Dr Reddy's medical representative network to grow the business.

Goldman Sachs maintained a neutral rating on Nestle India but raised the target price to Rs 2,550 from Rs 2,500 earlier.

Motilal Oswal

The company has been building its strategy around its RURBAN concept. The distribution penetration has been benefiting Nestle India across most of its categories. Packaged food penetration has improved in the tier-2 and rural markets. The brokerage firm states that Nestle India's portfolio is relatively safe from local competition