Nestle Shares Trade 3.27% Lower Amid Dismal Q2 Performance, Should You Buy?

Large cap FMCG giant Nestle India Ltd shares today 3.27% lower after the company reported dismal q2 results. The large cap FMCG giant today declared its net profit for Q2 FY25 to Rs 899 crore, down 0.99% as against Rs 908 crore declared in the corresponding quarter of last year. The company's revenue from operations for Q2 financial year 2025 announced at Rs 5104 crore, up 1.3% from Rs 5037 crore announced in the similar quarter of last year.

Speaking on the results, Suresh Narayanan, Chairman and Managing Director of Nestle India, said, "Despite a challenging external environment with muted consumer demand and high commodity prices especially for coffee and cocoa, we remained resilient in our pursuit to deliver growth. This quarter, 5 of our top 12 brands grew at double-digit. However, some key brands witnessed pressure due to softer consumer demand and we focus on them and have in place robust action plans. It is heartening to note that in the last 9 months, 65% of our top 12 brands including MAGGI noodles showed positive volume growth."

Nestle India Results: The prices of commodity stayed higher especially of coffee and cocoa, while prices of cereals and edible oils also being accentuated with latest developments. However, relative stability in milk prices and packaging so far remained. On the other hand, Nestle India's Swiss parent declared on October 17 that it plans to revamp the senior leadership and its operating structure, cut its full-year sales outlook and reported worse-than-expected nine-month organic sales growth, after failing to raise volumes amid continued price hikes.

Nestle India Shares Performance: The 52-week high price of Nestle India shares on BSE stood at Rs 2,777.00 per share (as on 27/09/2024) and 52-week low price is Rs 2310.00 per share (as on 19/10/2023), respectively. Nestle India has a market capitalisation of Rs 2,29,956.30 crore. Nestle India shares slipped over 10% in last 2-weeks, slipped 12.80% so in 2024, and gained 2.33% in last 1-year. Nestle India shares offered attractive ROE of 97.11.

Nestle India Shareholding: Promoters holding remains unchanged at 62.76% in June 2024 quarter. FII/FPI have decreased holdings from 12.10% to 11.94% in June 2024 quarter. Number of FII/FPI investors decreased from 1000 to 984 in June 2024 quarter. Mutual Funds have decreased holdings from 4.45% to 4.37% in June 2024 quarter. Institutional Investors have increased holdings from 21.15% to 21.16% in June 2024 quarter.

LIC Stake: It is worth noting that Life Insurance Corporation of India (LIC) has 2.40% stake in Nestle India with 23,094,454 shares of the company.

Nestle India Stock Split History: Nestle India split the face value of its share once since January 5, 2024. Nestle India last split the face value of its shares from Rs 10 to Re 1 in 2024.The share traded ex-split as on January 5, 2024.

Should You Buy Nestle Shares? Yes Securities has a buy call on the FMCG major with a target price of Rs 3,237. Yes Securities said, rural growth is likely to rebound in the upcoming quarters, triggered by favourable monsoons, increased government spending, and a surge in urban remittances, all of which are expected to back the rural recovery. Earlier, Axis Securities too recommended buy call to Nestle shares with target price of Rs 2800.

According to A R Ramachandran, Independent SEBI Research Analyst, "Nestle India is bearish but also oversold on the Daily charts with strong resistance at 2465 on the Daily charts. A daily close above this resistance could lead to target of 2648 in the near term. Next support will be at 2263."

About Nestle India: Nestle India is a subsidiary of Nestle S.A. of Switzerland. With eight factories and a large number of co-packers, Nestle India is a vibrant Company that provides consumers in India with products of global standards and is committed to long-term sustainable growth and shareholder satisfaction, according to its official website.

Disclaimer:

The stock has been picked from the brokerage report of A R Ramachandran, Yes Securities, and Axis Securities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.