Nestle India's performance for Q4CY18 missed estimates on profitability fronts; revenue was broadly in-line. Revenue for the quarter grew 11.4% yoy to Rs2,897.3cr. Despite benign input costs, gross margin for the quarter remained flat; we believe it is because of the product mix. Further, on account of significant jump in other expense, EBITDA declined marginally by 1.1% yoy to Rs557.5cr, ~17% below consensus estimates; EBITDA margin contracted by 244bps yoy to 19.2% (estimate 23.5%). Aided by higher other income (up 47.2% yoy) PAT reported growth of 9.6% yoy to Rs341.8cr, ~19% below estimates.
Domestic sales for the quarter grew by 12% yoy supported by broad based volume growth. Exports remained flat yoy due to lower exports to Bangladesh & United Arab Emirates.
Other expenses increased 285bps yoy as percent of net sales due to step up in demand generating activities including expense on new products.
Other income was up 47.2% yoy to Rs75.2cr; this was aided by higher average liquidities as well as higher yields.
Nestle India Ltd is currently trading at Rs. 10,225.85, down by 356.25 points or 3.37% from its previous closing of Rs. 10,582.10 on the BSE.
The scrip opened at Rs. 10,590 and has touched a high and low of Rs. 10,590 and Rs. 10,212 respectively. So far 26,032 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 50 DMA.
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