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Nestle Stock- Consistent Wealth Builder | Yadnya Investment Academy

Nestle Stock- Consistent Wealth Builder | Yadnya Investment Academy

Published on 22 April 2021 .Views 292 .Comments 1
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Nestle India releases its Q4FY21 (Q1CY21) at its Board Meeting held on 20th April 2021. How did the company perform in this quarter? To know, go through this article.

Introduction:  Nestle Share Price Value Research

Nestle India, the leading player in the FMCG segment, has announced its quarterly results for Q4FY21 on 20th April 2021. The company has shown double-digit growth in Domestic Sales growth and has posted a robust net profit figure. Let analyse the quarterly result of the company in depth.

Q4FY21 Results:  Nestle Share Market Price

  • Nestle has posted strong growth in its Sales. It has grown sequentially by 5% to Rs. 3,611 Cr. from Rs. 3433 Cr. in December Quarter. While the sales have increased by 8.9% YoY, which was Rs. 3,325 Cr. in the quarter ended March 2020.

  • Under the sales, the company has reported growth of domestic sales in double-digit of 10.2% YoY, but the export is down by 12.9% YoY in Q4FY21.

  • Growth in sales is broad-based and primarily driven by volume and mix.

  • Across the board, all the nestle products are performing well. Still, Key brands like Maggi Noodles, KitKat, Nescafe Classic, Maggi Sauces, Milkmaid, Maggi Masala-Ae-Magic delivered robust performance and achieved double-digit growth.

  • The Operating Profit of the company stands at Rs. 960 Cr. in Q4FY21 with a stellar growth of 19% QoQ and 15% YoY. The operating Profit of Nestle was Rs. 836.16 Cr. in Q4FY20.

  • Another big positive thing for Nestle in this quarter is growth in their Operating Profit Margin from 25% in Q4FY20 and 24% in Q3FY21 to 27% in Q4FY21.

  • Profit Before Tax (PBT) of the company is around Rs. 812 Cr. in Q4FY21. It has grown by 21% quarterly and by 15% YoY from Rs. 704 Cr. in Q4FY20.

  • Further company has posted a strong Net Profit Figure of Rs. 602 Cr. in Q4FY21. It has grown by 24.6% from Rs. 483 Cr. in Q3FY21. Year on Year, Company has reported a growth of a significant 14.6% in Net Profit, Rs. 525 Cr. in the same quarter in the last financial year.

  • Also, Company is near around touching its all-time high levels of Net Profit Margin of 19%. The NPM is approximately 17% in Q4FY21, which was 14% in the previous quarter.

Return Ratios:

  • Return on Capital Employed (ROCE) of the company is very strong, i.e., 147.88 in the quarter ended 31st March 2021.

  • Whereas the Return on Equity (ROE) of Nestle is 105.76.

  • Nestle is a virtually debt-free company with a Debt-to-Equity ratio of a mere 0.02, while the company’s Interest Coverage Ratio is 18.13.

Valuation: Nestle Market Share Value

  • The average PE ratio of last 1 year, 3- Year, and 5 Year is 78.54, 72.88, and 68.32.

  • Stock is currently trading at a higher PE ratio than the Median PE ratio of last one year, 3- Year, and 5 Year of 79.11, which accounts for a premium valuation of around 10%-15%.

Q4FY21 Highlights:

  • Domestic Sales achieve double-digit growth, on a 10.7% strong growth base in Q4FY21.

  • Essential products boosted by in-home consumption posted double-digit growth. Key brands like Maggi Noodles, KitKat, Nescafe Classic, Maggi Sauces, Milkmaid, Maggi Masala-Ae-Magic delivered robust performance and achieved double-digit growth.

  • The E-Commerce channel grew by 66% and contributed 3.8% of domestic sales.

  • Recently, witnessing headwinds in commodity and packaging materials.

  • The company has taken responsible moves like Initiating vaccination camps for those eligible at factory locations.

  • Also, Nestle achieved plastic neutrality across all brands in 2020.

  • Nestle Share Dividend - Declared Interim Dividend of Rs. 25 per equity share.

  • Nestle Share Value - The company is having Earning Per Share of 62.46.

Conclusion: Nestle Share Growth

Nestle India has posted a strong quarterly result and has shown a stellar performance in its domestic sales by achieving double-digit growth of around 10.2%, which is phenomenal. The company looks optimistic and well prepared to deal with the ongoing situations caused due to the second wave of Covid-19.


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