June-quarter miss, valuations may restrict upside in Nestle India

Brokerages have cut their profit estimates by 3-5 per cent

The stock of Nestle India, the fourth largest consumer company by market capitalisation, slipped by a per cent after its June quarter results came in lower than street estimates. This coupled with a cut in net profit estimates and higher valuations led to the weakness in the stock.

While the company posted a steady 14 per cent YoY growth driven by volume and product mix, this was on a weak base of 1.7 per cent and lower than consensus estimates. The ongoing trend of in-home consumption led to a double digit growth in noodles, chocolates and sauces. Contribution from e-commerce