Nestle India, a subsidiary of Nestle S.A. of Switzerland, is a food and drink company that provides consumers with a comprehensive range of products comprising beverages, milk products, chocolates, and prepared dishes.
The market cap of Nestle India Limited, as of March 2018, is more than Rs.73,000 crore.
Company’s Wealth and Recent PerformanceQ2 FY 2018
- For the three months ended on June 30, 2018, Nestle India Limited reported its total income to be at Rs.2,758.6 crore. With respect to the same quarter of the previous year, the company’s total revenue has improved by a little over Rs.250 crore.
- For the June quarter, the company reported a net profit of Rs.395 crore, in comparison to Rs.263.4 crore reported for the corresponding quarter of the previous year. The increase in the profit came on account of an increase in the revenue.
- Subsequently, the company’s earnings per share (EPS) jumped up from Rs.27.32 to Rs.40.97 y-o-y.
- For the quarter ended on June 30, 2018, the company’s non-current liabilities were worth Rs.2,474 crore as against Rs.2,449.2 crore reported for the same period of the previous year.
- For the quarter ended on March 31, 2018, Nestle India Limited reported its total income to be at Rs.2,813.6 crore. In comparison to the same quarter of the previous year, this marked an increase of a little over Rs.170 crore.
- The total expenditure for the March quarter remained flat at Rs.2,173 crore.
- The company’s net profit for the period was reported to be at Rs.424 crore, in comparison to a net profit after tax of Rs.306.7 crore reported for the March quarter of the previous year. This marked an increase of a little over 35% in profits, y-o-y.
- Consequently, the company’s basic earnings per share (EPS) moved up from Rs.31.82 to Rs.43.98 y-o-y.
- Nestle’s total sales for the year 2017 were valued at more than Rs.10,000 crore, of which, domestic sales grew by 8.2%. The food conglomerate also reported an increase in profit from operations over the previous year. The company’s net profit for the year was reported to be at Rs.1,225 crore - a roughly 20% increase over the net profit made in 2016.
- Even though Nestle reported an increase in sales, the figures were still less than the estimated growth of 11.8%. The lower sales stemmed from the change in the structure of indirect taxes and the implementation of Goods and Services Tax.
- Nestle also launched 15 new products in the course of last year, the highlights of which are Maggi Nutri-licious Noodles, Milkybar Moosha, and Kit Kat Dessert Delight.
- The company’s Earnings per Share is Rs.127.07 and the board has also recommended a final dividend of Rs.23 for every equity share. This takes the total dividend for the year to Rs.86 per equity share.
Nestle India Limited Stock Trends in 2018
- The opening price of Nestle stock on January 1, 2018, was Rs.7,900 on NSE and Rs.7,880 on BSE. The share price for the first half of the month did not vary that much. In the second half, however, the stock lost more than Rs.400 and as a result, the closing price at the end of the month on NSE was Rs.7,483 and Rs.7,436 on BSE.
- The month of February was a tumultuous one for the investors. Through the first week of February, the stock price continued to fall, starting from Rs.7,499 on NSE to Rs.6,973, in just nine days. This may have been driven by turbulence in the worldwide markets. It is also worth mentioning that SENSEX lost points heavily in the same period. However, the stocks recovered quickly driven by a surge in profits in the fourth quarter. The closing price at the end of the month on NSE was Rs.7,761.
- On March 1, the opening stock price of Nestle India Limited was Rs.7,777 on the NSE. The prices didn’t vary considerably over the course of the month and the shares maintained their bearings at levels close to Rs.7,800. Over the course of April, the prices gained a little over 10% in a gradual manner to cross the Rs.8,800. In fact, by the end of the month, the shares had soared into the Rs.9,000 region.
- In May, the company announced a final dividend of 230% and an interim dividend of 200%. Around the same time, the Nestle India Limited share price had crossed the Rs.9,500 mark. Over the course of the next few weeks, the Nestle shares were seen trading hands at levels close to Rs.9,500 - Rs.10,000.
- In July, the shares finally gained momentum at the Rs.10,000 mark and managed to find a strong heading thereafter. The price continued to rise steadily and eventually, the shares crossed the Rs.10,500 mark.
- In August, the company announced an interim dividend of 200%. Later that month, the shares crossed the psychologically important mark of Rs.11,000 and eventually, they reached their 52-week high at Rs.11,705. In September, however, the shares lost close to 10% to descend to their previous levels at Rs.10,000. As of September 20, the shares were seen trading at levels close to Rs.10,100.
Nestle India Limited Stock Trends in 2016 and 2017
- The stock price of Nestle at the start of 2016 was close to Rs.5,810 on NSE and BSE. By the end of the month, the stock share price had gone down by roughly Rs.400. In February, the stocks lost more value and as a result, they were being traded at around Rs.5,100. However, in March, the stocks recovered on the back of updates and new product launches.
- The month of April began with Nestle stock price steadily moving close to Rs.6,000. It did cross the limit, albeit it was only for a short while. As a result, by the end of the month, the price was back in Rs.5,900 territory. In early May, the price declined further but only to recover swiftly. A final dividend was announced in mid-May that helped the price cross Rs.6,200 by the end of the month.
- Nestle share price on NSE and BSE rose steadily through the months of June and July. By mid-June, the shares were changing hands at around Rs.6,500 but following the announcement of an interim dividend, the stock price crossed Rs.7,000 by the end of the month. However, it failed to sustain that newly found high for long.
- By the end of September, the shares had lost value once again and as a result, they had gone below Rs.6,500. However, on the anticipation of Q3 results, the price went up again, although it was only for a short while. The stocks suffered heavily post demonetisation and by the end of November, they were being traded at less than Rs.6,000. Nonetheless, the announcement of the third dividend for the year helped the price recover, though it went down again. The closing price at the end of 2016 was Rs.6,028 on NSE.
- The shares in early January 2017 were being traded at around Rs.5,900. It remained that way up until February, when the price went up again and crossed Rs.6,000. Thereafter, the share price continued to rise without incurring any sharp falls. By early April, the stock price had crossed Rs.6,600.
- Through April and May, the share price remained in the Rs.6,000 territory. By late May, the stock price surged again and for a short while, it crossed Rs.6,900 on the anticipation of the interim dividend. An interim dividend of 150% was announced in May. Through the months of June and July, the share price continued to move up. Despite the small dips in this period, the share price by the end of July 2017 was Rs.6,785 on NSE.
- An interim dividend of 150% was announced in early August which was eventually followed by a spike in stock price. By the end of the month, the share price had crossed Rs.7,000 on NSE and BSE. In September and October, Nestle stock price remained above the aforementioned amount. There were a couple of instances when the price crossed Rs.7,300 but it failed to stabilise there.
- In November 2017, the share price of Nestle witnessed another spike following the company’s splendid performance in the third quarter and this time, it went beyond Rs.7,800. An interim dividend of 330% was announced in December and the closing price at the end of the month was Rs.7,870.
Should you invest in Nestle India Limited?
- Nestle’s market share in the food processing sector is undoubtedly among the largest. Their flagship product, Maggi, recently turned 35 in India and the company is now working towards making the preparation process transparent. This includes the dedicated website for Maggi that has been set up by the conglomerate. Hence, it is fair to say that Nestle has not only managed to get past the controversy that surrounded Maggi, but it has also taken concrete steps to prevent it from happening again.
- Over the years, Nestle’s financial performance has been better than that of its peers in the same sector. Its sales turnover and gross profit, for most of the time, have been much greater than those generated by other companies like Britannia, GlaxoSmith Con, and Hatsun Agro. Therefore, if you are looking to hold a stock in the food processing sector, it makes sense to go with Nestle, given their sound financial position, long history, and strong fundamentals.
- At the same time, Nestle stock price is definitely pricey and it may make sense to look into mutual funds with holdings in Nestle. Alternately, you can also wait for a more favourable entry point. Whatever may be the course of action, it is advisable to do your own research before investing.
Nestle is the world’s largest food and beverage company, comprising more than 2,000 brands across 191 countries. Nestle India is a subsidiary of Nestle S.A., Switzerland. The company has been a part of the Indian market for more than a century now and in that time, it has won the trust of millions of customers. It is for this reason that Nestle India is regarded as one of the most respected companies and also considered to be among the top wealth creators of India. The company has eight manufacturing units in the country and four branch offices. Its vision is to enhance the quality of life and contribute towards a healthier tomorrow.
History of the Company
Nestle’s roots can be traced back to 1866 when the Anglo-Swiss Condensed Milk Company was founded. Soon after the company was formed, Henri Nestle developed infant food and in 1905 after years of fierce competition, the company he formed merged with the Anglo-Swiss Milk Company to form the Nestle Group that we see today.
Nestle Anglo-Swiss Condensed Milk Company entered the Indian market in 1912, and started importing and selling finished products in the country. Following the independence of the country in 1947, the Government of India emphasised on local production to boost the economy. Nestle responded to this call by setting up its first factory in Moga, Punjab, in 1961, where it was tasked with the job of boosting milk economy. Over the course of next couple of decades, the company expanded and launched several products in the market, many of which have proven to be a big hit among the people.
Mr. Suresh Narayanan - Chairman and Managing Director
Mr. Narayanan has been a part of the FMCG industry for more than 30 years and has held various important positions in his impressive career. He joined Nestle in 1999 as the Executive Vice President for Sales in India, where he paved way for many changes in sales and customer management sector. Before joining the Board of Directors as a Managing Director, Mr. Narayanan served as the Chairman and CEO of Nestle Philippines. Furthermore, he has also served as the Managing Director of Nestle Singapore Private Limited, and Chairman and CEO of Nestle Egypt.
Mr. Narayanan has a Masters degree in Economics from Delhi School of Economics.
Mr. Shobinder Duggal - Director of Finance & Control and CFO
Mr. Duggal holds a degree in Economics which he obtained from St. Stephens College, Delhi University. He also attended the Executive Development Program at IMD, Lausanne. He has been with Nestle for more than 29 years during which time, he was tasked with various responsibilities in Nestle India Limited. He is also the Chairman of Risk Management Committee.
Nestle India Limited Listings in NSE, BSE, & Indices
Nestle India Limited shares can be bought and sold on the National Stock Exchange Limited and Bombay Stock Exchange during the working hours. The codes for the same are mentioned below:
BSE - 500790
NSE - NESTLEIND
ISIN - INE239A01016
Sector - Food Processing
Coming to the stock market indices, Nestle India is not a part of BSE SENSEX and NIFTY 50. However, it is listed on S&P BSE 100, S&P BSE 500, S&P BSE 200, et cetera.
Nestle India Limited
Nestle House, Jacaranda Marg M Block
DLF City Phase II, National Highway 8
Gurgaon 122-002, India
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