External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul><li>Weak Performance: Nestle posted lackluster results for Q2FY25, with revenue growing by 1.3% YoY (compared to estimates of 6%), primarily due to subdued domestic demand, as volumes de-grew by 3% YoY.</li><li>On a positive note, 5 out of 12 brands achieved double-digit growth, with the beverage portfolio showing strong high double-digit gains driven by increased penetration and premiumization. </li><li>Margins pressure: The company continues to face significant cost challenges, with prices for coffee and cocoa remaining elevated, while cereals and grains experienced initial cost pressures. However, costs for milk and packaging have remained stable.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Weak Performance: Nestle posted lackluster results for Q2FY25, with revenue growing by 1.3% YoY (compared to estimates of 6%), primarily due to subdued domestic demand, as volumes de-grew by 3% YoY.On a positive note, 5 out of 12 brands achieved double-digit growth, with the beverage portfolio showing strong high double-digit gains driven by increased penetration and premiumization. Margins pressure: The company continues to face significant cost challenges, with prices for coffee and cocoa remaining elevated, while cereals and grains experienced initial cost pressures. However, costs for milk and packaging have remained stable.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Nestle India Ltd. - Short-Term Turbulence Continues, Long-Term Outlook Remains Intact

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

HDFC securities is the best online trading platform for stocks, IPOs, mutual fund in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>We carried out detailed channel checks across India to gauge what has gone wrong and led to sub-par 1QFY25 performance, and how the current quarter is shaping up regarding the end consumer demand</li><li>We have been able to decipher the following reasons for this weak performance: (a) product formulation change coupled with packaging change in Lactogen in selected geographies has caused inventory correction</li><li>Moreover, the increased competitive intensity has majorly weighed on segmental performance (b) Nestle has stopped the practice of price laddering in the Noodles segment (c) disproportionate price increases in the coffee segment, which impacted end consumer offtake and (d) unfavourable weather conditions (extreme heatwaves) leading to reduced Out-of-Home consumption frequency, which affected the Out-of-Home channel’s performance</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We carried out detailed channel checks across India to gauge what has gone wrong and led to sub-par 1QFY25 performance, and how the current quarter is shaping up regarding the end consumer demandWe have been able to decipher the following reasons for this weak performance: (a) product formulation change coupled with packaging change in Lactogen in selected geographies has caused inventory correctionMoreover, the increased competitive intensity has majorly weighed on segmental performance (b) Nestle has stopped the practice of price laddering in the Noodles segment (c) disproportionate price increases in the coffee segment, which impacted end consumer offtake and (d) unfavourable weather conditions (extreme heatwaves) leading to reduced Out-of-Home consumption frequency, which affected the Out-of-Home channel’s performanceContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Nestle: Interpreting the Weak 1QFY25 Performance. Maintain ADD

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Nimish Maheshwari

Market & Forensics Analyst

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Thematic (Sector/Industry)

<ul>
<li>SEBI’s study reveals rising royalty payments by listed companies to related parties, highlighting doubling of payments to Rs. 10,779 crore in FY23 over a decade.</li>
<li>25% of firms pay royalties exceeding 20% of net profits, raising concerns about transparency, governance, and shareholder returns versus royalty prioritization.</li>
<li>SEBI's findings stress the urgency for enhanced royalty disclosures, policy revisions, and better scrutiny to protect minority shareholders and corporate governance standards.</li>
</ul>


SEBI’s study reveals rising royalty payments by listed companies to related parties, highlighting doubling of payments to Rs. 10,779 crore in FY23 over a decade.
25% of firms pay royalties exceeding 20% of net profits, raising concerns about transparency, governance, and shareholder returns versus royalty prioritization.
SEBI's findings stress the urgency for enhanced royalty disclosures, policy revisions, and better scrutiny to protect minority shareholders and corporate governance standards.


SEBI Study: Royalty Payments by Listed Companies to Related Parties

<ul><li>We believe Nestle has the potential for double-digit revenue growth in the medium term, unlike peers struggling with high single-digit growth, owing to several factors: (a) ramping up its rural distribution network, currently under-indexed, (b) focusing on substantial growth in its out-of-home channel, (c) prioritizing the salience of NPD and category creation efforts, (d) investing in capacity expansion (with a capex of INR 65bn over CY20-25) to align with long-term penetration-led volume growth objectives, (e) India’s prioritization as one of the top 10 markets despite contributing only 2% of global revenue</li><li>We also expect the EBITDA margin to expand c100bps from FY24-27 to 25%, despite being at a decadal high, owing to operational scale improvements, premiumization, and cost optimization initiatives</li><li>We upgrade Nestle to ADD from REDUCE with a TP of INR 2,750 (70x FY26 EPS) and recommend investors to accumulate the stock amidst any negative news flows.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We believe Nestle has the potential for double-digit revenue growth in the medium term, unlike peers struggling with high single-digit growth, owing to several factors: (a) ramping up its rural distribution network, currently under-indexed, (b) focusing on substantial growth in its out-of-home channel, (c) prioritizing the salience of NPD and category creation efforts, (d) investing in capacity expansion (with a capex of INR 65bn over CY20-25) to align with long-term penetration-led volume growth objectives, (e) India’s prioritization as one of the top 10 markets despite contributing only 2% of global revenueWe also expect the EBITDA margin to expand c100bps from FY24-27 to 25%, despite being at a decadal high, owing to operational scale improvements, premiumization, and cost optimization initiativesWe upgrade Nestle to ADD from REDUCE with a TP of INR 2,750 (70x FY26 EPS) and recommend investors to accumulate the stock amidst any negative news flows.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Nestle: Best Proxy on Great Indian Consumption Story. Upgrade to ADD

<ul><li>Nestle delivered resilient all-round performance. This was driven by strong growth across all categories, with a healthy balance of the product mix, pricing, and volume growth.</li><li>Domestic revenue grew by 8.9% YoY (~5% volume estimates) and exports grew 19% YoY). Gross margins improved by 310bps YoY to 56.7% owing to softer RM and improved product mix. It reported EBITDA margins of 25.7%, up 289bps YoY.</li><li>The company’s adjusted PAT grew 27% YoY to Rs 934 cr.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Nestle delivered resilient all-round performance. This was driven by strong growth across all categories, with a healthy balance of the product mix, pricing, and volume growth.Domestic revenue grew by 8.9% YoY (~5% volume estimates) and exports grew 19% YoY). Gross margins improved by 310bps YoY to 56.7% owing to softer RM and improved product mix. It reported EBITDA margins of 25.7%, up 289bps YoY.The company’s adjusted PAT grew 27% YoY to Rs 934 cr.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Nestle India Ltd. - All Round Performance; Maintain BUY

India

Nestle India Ltd. manufactures brand name milk products and other food products. The Company's products include Everyday dairy whitener, milk powder and ghee, Milkmaid sweetened condensed milk and Cerelac weaning foods. Nestle's beverages include Nescafe and Sunrise coffee and Nesfit enriched glucose powder. Nestle also manufactures Maggi noodles, soups and sauces.

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Nestle India (NEST IN)

Nestle India Ltd. - Short-Term Turbulence Continues, Long-Term Outlook Remains Intact

Nestle posted lackluster results for Q2FY25, with revenue growing by 1.3% YoY (compared to estimates of 6%), primarily due to subdued domestic...

Axis Direct

Nestle: Interpreting the Weak 1QFY25 Performance. Maintain ADD

We carried out detailed channel checks across India to gauge what has gone wrong and led to sub-par 1QFY25 performance, and how the current quarter...

HDFC Securities

Nestle: Best Proxy on Great Indian Consumption Story. Upgrade to ADD

We upgrade Nestle to ADD from REDUCE with a TP of INR 2,750 (70x FY26 EPS) and recommend investors to accumulate the stock amidst any negative news...

HDFC Securities

Nestle India Ltd. - All Round Performance; Maintain BUY

Nestle delivered resilient all-round performance. This was driven by strong growth across all categories, with a healthy balance of the product...

Axis Direct

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52-week Range

Market Cap (USDm)

P/E

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Nestle India Ltd. - Short-Term Turbulence Continues, Long-Term Outlook Remains Intact

Nestle posted lackluster results for Q2FY25, with revenue growing by 1.3% YoY (compared to estimates of 6%), primarily due to subdued domestic...

Axis Direct

Nestle: Interpreting the Weak 1QFY25 Performance. Maintain ADD

We carried out detailed channel checks across India to gauge what has gone wrong and led to sub-par 1QFY25 performance, and how the current quarter...

HDFC Securities

SEBI Study: Royalty Payments by Listed Companies to Related Parties

​SEBI study shows listed companies increasing royalty payments to related parties, raising transparency and governance concerns, urging for better...

Nimish Maheshwari

Nestle: Best Proxy on Great Indian Consumption Story. Upgrade to ADD

We upgrade Nestle to ADD from REDUCE with a TP of INR 2,750 (70x FY26 EPS) and recommend investors to accumulate the stock amidst any negative news...

HDFC Securities

Nestle India Ltd. - All Round Performance; Maintain BUY

Nestle delivered resilient all-round performance. This was driven by strong growth across all categories, with a healthy balance of the product...

Axis Direct

SEBI study shows listed companies increasing royalty payments to related parties, raising transparency and governance concerns, urging for better...