Nestlé India Company analysis

 

Industry profile  : Personal Care and consumer staples is the sector which hardly get affect by any crisis. because you cant stop using tooth pest, Soap. life span of the products also high. shelf life is also small. Investors see this companies as secure place in crisis as maybe consumers may change habits about other things but its difficult about this things. This is perfect sector for investor seeking steady growth, dividend and low volatility. As 70% of Gross National Product is consumer spending and consumer staples sector is important part of it, we cant ignore it. plus this sector is hardly any cyclical. means even if your income is changed negatively, you cant stop using Soap. demand for soap, tobacco, tooth pest, Dish wash will not change drastically and that is like double edge sward for the sector. you can not see growth like Financials or automobile companies but you can hardly see them telling you that our revenue is also down.

Their profit per item is also small but when the volume is high that factor is cover. That’s why for this sector Same Store Sales growth and volume growth is more important then Margin.

Company profile  :  Nestlé India, Indian subsidiary of Swiss Nestlé S.A. is a food and drink company. Parent company is the largest food company in the world, measured by revenues and other metrics, since 2014. The company is doing business in india since 1912. and having large product portfolio such as NESCAFÉ, MAGGI, MILKYBAR, KIT KAT, BAR-ONE, MILKMAID and NESTEA. Nestlé’s products include baby food, Medical food, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks.

Shareholding pattern  :  2  ( Nestlé SA and Maggi Enterprises LTd)  Promoter entities hold 62.76%. Mutual Funds hold 1.67%. financial Institutions hold 0.1%.  88,063 shares, nearly 0.09% held  by 2 Govts. 6.1% held by Insurance companies. 11.97% held by Foreign investors. Remaining is held by Public.

Financials and ratio  : 

 December 11December 12December 13December 14December 15December 16
Revenue7,541.718,365.569,184.149,942.168,285.409,373.19
Net Profit961.551,067.931,117.131,184.69563.27926.54
NPM12.74%12.76%12.16%11.91%6.79%9.88%
EPS1001111161235896.10
Book value132.13186.52245.67294.26292.25312.56
Dividend Per share48.5048.5048.506348.5063
Dividend Payout48.6343.7841.8551.2783.0165.55
ROE75.4759.3847.1641.7519.9830.74
ROCE32.7626.5322.4926.5312.2317.91
ROA21.8420.6817.6920.359.2613.61
Asset turnover170.71161.39144.13169.34134.45135.52
Debt to equity0.760.580.50.010.010.01

Future prospectus.  :  Even in worst case scenario, The fundamentals looking good. there is competition is there with Patanjali but still the fundamentals are strong. Maggi gain the market share lost to Patanjali and Yipee nudels. there are many products sold by Company and so the company cant be ignored for investment grade.

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter