Nomura sees this FMCG major dividend paymaster's stock growing one-fifth in value

Nestle dividend 2023: FMCG major Nestle India's (NSE: NESTLEIND) board may announce an interim dividend for its shareholders on April 12, 2023 (Wednesday). The FMCG firm has fixed April 21 as the record date for the dividend payout subject to approval by the Board at Nestle India’s 64th Annual General Meeting on April 12. Nestle India dividend will be credited directly into the shareholders' bank account linked to their Demat account on May 8.

Nestle dividend 2023 record date, Nestle dividend payment date 

Known as a dividend paymaster stock, Nestle India has declared 66 dividends since May 31, 2001, as per Trendlyne.com data. In the last 12 months, the FMCG firm has declared an equity dividend amounting to Rs 210 per share, the website added.

Nestle India's last 10 dividend payouts

(Source: Trendlyne)

In February, the Nestle India board had approved the payment of Rs 75 dividend per equity share having a face value of Rs 10 each.

Read- Nestle India dividend: Rs 75 per share - check record date and payment date

Why Nomura thinks Nestle India shares can jump more than 20%?

Nestle India has a "sound strategy for consistent growth," said global brokerage Nomura said in research report dated March 24. Nomura has set a target price of Rs 22,900 for Nestle India with a 'buy' rating. The target implies an upside of more than 20 percent from the current price levels of around Rs 19,000. The brokerage values Nestle India at a price–earnings (P/E) ratio of 68x Dec-24 EPS, in line with its past three-year average trading multiple.

Also read- Top dividend stock: Six companies that have rewarded investors with 162.5-1,300% dividend recently

The chief factors that work for Nestle India is, as per Nomura analysts, is the FMCG major's focus on driving pentetration-led growth in core portfolio, calibrated cost saving in initiatives, continued ivnestments in high-growth and high-margin NPDs and geo-targeted distribution expanions (20 per cent over CY21-23) under RURBAN should deliver sustainable growth over the medium term.

"We cut CY23/24F EPS by 1% / 3% on higher depreciation charge due to strong capex announcements. We roll our valuation forward to Dec-24F EPS (vs. Sept-24F) and value NEST at 68x P/E (unchanged) to arrive at a TP of INR22,900 (unchanged). We reiterate our Buy rating with a +13% EPS CAGR over CY22-25F," Nomura analysts wrote in the report.

Among key risks to Nomura's target on Nestle India is slower demand for its core products.

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