You are here: Home » Markets » Features
Business Standard

Analysts' corner

Nestle India & Siemens India

SI Team  |  Mumbai 

Reco price: Rs 4,935;
Target price: Rs 4,761

Standard Chartered Equity research has downgraded Nestle to In-Line as all-time-high forward price/earnings of 39 times offers no upside potential. Results lower than expected with net sales, Ebitda and net profit growing by 13.1 per cent, 19.5 per cent and 9.2 per cent respectively, against analysts' expectations of 16.6 per cent, 21.4 per cent and 16.6 per cent, respectively. Reduced focus on low-margin products and channels hurts domestic sales growth (13.7 per cent) but improves gross margins by 300 basis points y-o-y. Higher depreciation and tax rates moderate bottom line growth. Standard Chartered equity research has cut its CY12/13 EPS estimates by 3.4/4.6 per cent and revised its 12-month price target to Rs 4,761 (earlier Rs 4,938). Downgrade to In-Line.

Standard Chartered Equity research

Reco price: Rs 773;
Target price: Rs 625
Sales growth appears lumpy; order decline of 45 per cent and order book erosion of 18 per cent further deteriorate the outlook. Margin improvement accentuated by release of provisions; headwinds prevail as low volumes & pricing pressure persist. Siemens's commentary regarding the current business environment has turned extremely cautious.

The demand outlook remains weak, volumes are likely to be low, and pricing pressure (competition) may intensify, as demand in China is eroding fast. HSBC has cut its FY13 EPS estimates by nine per cent and it expects earnings downgrades to drive the stock lower. Maintain Underweight.

HSBC Global Research

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, May 04 2012. 00:35 IST