Brokerage house ICICI Securities is bullish on FMCG giant Nestle India and PSU Coal India over good q3 results and meeting its expectations for the October-December quarter.  While the brokerage maintained a buy rating on Coal India, It upgraded Nestle India from 'hold' to 'add.' 

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Nestle India | Target Price 20,000 

FMCG major Nestle India Ltd, which follows a January-December financial year, saw its revenue from operations going up by 8.93 per cent to Rs 3,739.32 crore during the period under review, as against Rs 3,432.58 crore in the corresponding period last fiscal.  

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Nestle India's total expenses in the the quarter, were also up 8.23 per cent to Rs 3,022.97 crore, as against Rs 2,793.01 crore of the corresponding period, while domestic sales were up 9.17 per cent to Rs 3,559.78 crore, as against Rs 3,260.70 crore in the July-September of 2020. 

Though FMCG major Nestle India Ltd on Thursday reported a 20 per cent decline in its net profit at Rs 386.66 crore for the fourth quarter ended December 31, 2021 against a profit of Rs 483.31 crore in the same period a year ago, ICICI Securities has upgraded rating of the FMCG major. Nestle Indian managed all aspirations (quite) well. We upgrade this counter from 'hold' to 'Add'," said the brokerage. 

Saying gains from distribution expansion and good product pipeline (premiumisation potential as consumers upgrade) are key long-term drivers for the stock, the brokerage revised target price from Rs 19,500 to Rs 20,000. This translates into a gain of 10.3 per cent on CMP of Rs18,126.  

Coal India | Target Price 234 

State-owned Coal India Ltd has reported a 48% YoY rise in the consolidated profit at Rs 4,558 crore for the quarter ended December 31, 2021, as against Rs 3,085 crore posted in the year-ago quarter.  

The company's revenue from operations grew 20% YoY to Rs 28,434 crore as compared to Rs 23,686 crore posted last year. EBITDA stood at Rs 6,826, up 32% YoY from Rs 5164 crore. The margin improved to 24% in Q3FY22 against 22% posted in Q3FY21. 

ICICI Securities is of the view that high demand for domestic coal due to high thermal power PLFs and elevated international coal prices resulting in high e-auction volumes and premiums will better its growth in Q4FY22.  

It announced a second interim dividend of Rs5 per share, taking total dividend to Rs14 per share for FY22-TD (81% payout). We believe a final dividend of at least Rs4 a share will also be distributed. Record offtake, brighter days ahead. We maintain buy rating," it said.  

Maintaining buy rating for the PSU stock, the brokerage sees a target price of Rs 234, a whooping 40% upside, in one year.