Nestle's Q2 earnings beat Street's estimates. Should you buy stock?
Nestle India June quarter earnings beat Street's expectations, US brokerage Jefferies recommended a 'Hold' on expensive valuations, while Nuvama and ICICI Securities recommended a 'Buy' and 'Add', respectively. Motilal Oswal has a 'Neutral' stance on the counter. The stock on Friday fell to the day's low of Rs 22,187.30 on the NSE, down by 0.60% following its Q2CY23 earnings.
On Thursday the company reported a net profit of Rs 698.34 crore for the quarter ended June 2023, which was up 37% year-on-year (YoY) over Rs 510.24 crore reported by the company in the corresponding quarter of the previous financial year. The net profit was seen rising nearly 36% YoY to Rs 698 crore, according to the average of estimates given by 10 brokerages. Total sales for the said quarter stood 15% YoY to Rs 4,619.5 while domestic sales grew by 14.6% between April and June.
Look, what brokerages are saying on the stock: Jefferies: Hold | Target: Rs 19,900 Jefferies recommended a 'Hold' on Nestle India for a price target of Rs 19,900. The company witnessed a volume miss offset by margin expansion, the brokerage noted. Revenue growth was broad-based across cities and towns and also product segments.
Like the packaged food story, but valuations are expensive, it said. Nuvama: Buy | Target: Rs 25,810 Nuvama recommended a 'Buy' on the FMCG heavyweight with a price target of Rs 25,810. Nestlé’s Q2CY23 revenue grew as per the estimates of Nuvama while EBITDA/PAT growth was ahead of estimates.
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