Nestle India share price hits record high, becomes third largest FMCG firm in India

Nestle India share price climbed as much as 7.11 per cent to hit its lifetime high on Friday after the FMCG major reported a 35.98 per cent jump in profit at Rs 424.03 crore for the first quarter ended March 31, 2018. The company, which follows January-December financial year, had posted a profit of Rs 311.83 crore in the same period a year ago. 

The stock settled at Rs 9498.90, up 5.7 per cent on the BSE. During intraday trade, the stock hit its all-time high of Rs 9,619.7. The stock is up over 21 per cent on a year-to-date basis against just 4 per cent gains on Sensex.  

With Friday’s gain, Nestle India has become the third-largest consumer staples company in India with a market capitalisation of Rs 91,584.32 crore, surpassing Avenue Supermart’s market cap of Rs 90,773.09 crore. 

ITC and Hindustan Unilever, with a market cap of Rs 3,46,479.93 crore and Rs 3,26,400.12 crore, respectively, remain the largest companies in Indian consumer staples space.

Global brokerage Credit Suisse has a target price of Rs 11,000 on Nestle India, revising it from Rs 10,500 earlier. The brokerage maintained outperform rating on the stock, saying March quarter beat expectations as turnaround story continues for Nestle. 

"We expect Nestle India to accelerate the growth as more new product launches kick in. Industry leading growth gives comfort and lowering input costs add more tailwinds," Credit Suisse said. 

Brokerage IIFL sees Rs 10,000 target price on the stock. 

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"We upgrade our CY18/19/20 EPS estimates by 6%/5%/5% to factor in the 1QCY18 results. Maintain BUY with a TP of Rs10,000 (48x March20 EPS)," said IIFL in a results review report. 

However, brokerage Motilal Oswal Securities maintained 'neutral' rating on the stock with a target price of Rs 9,535. 

"Despite valuing the company at 44x Mar’20E EPS, at a 10 per cent discount to historical average, we get a target price of Rs 9,535, resulting in limited upside. We maintain our Neutral rating on the stock," it said.