Nestle Q3CY22 Results Preview: Maggi maker may post sales in double-digit, but margin woes to remain

Nestle India Result: Fast-moving consumer goods (FMCG) major Nestle India is expected to report healthy numbers in the third quarter of the calendar year 2022 (Q3CY22) on Wednesday, October 19, 2022. While the top and bottom lines are likely to show growth, the margins may come under pressure amid higher input costs.

According to Zee Business research, Nestle India’s revenue may grow by 13 per cent year-on-year (YoY) to Rs 4381 crore (estimate) in the July-September quarter of 2022 as compared to Rs 3883 crore in the same quarter a year ago.

While the profit may surge by 4.3 per cent to Rs.644 crore (estimate) in Q3CY22 against Rs 617 crore a year ago quarter. And EBITDA (earnings before interest, taxes, depreciation, and amortization) may show growth of 1.6 per cent to Rs.967 crore (estimate) versus Rs 952 crore a year ago quarter.

Nestle India’s margins during the quarter are likely to take a toll amid higher raw material prices, it is estimated to come at 22 per cent in Q3CY22 against 25 per cent YoY, Zee Business research said, adding that the operating profit margin will also be under pressure this time.

It is also expected, the company would witness a 6 per cent growth in each volume and value, Zee Business research noted and advised to watch out for commentaries on demand and material costs.

In line with Zee Business estimates, Street also expects the company to show double-digit growth in sales led by both volumes as well as pricing. It believes the foods segment may show volume growth despite high inflation in raw materials and estimates contraction in gross and operating margins.

Nestle India stock at present trades at 65x FY24E and it closed flat with a negative bias of Rs 18,866 per share on the exchanges on Monday. In the last six months, the counter is up nearly 2 per cent, while it has slumped around 4 per cent year-to-date.