⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
NESTLEIND - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | NESTLEIND | Market Cap | 2,32,024 Cr. | Current Price | 1,203 ₹ | High / Low | 1,340 ₹ |
| Stock P/E | 73.0 | Book Value | 23.7 ₹ | Dividend Yield | 1.12 % | ROCE | 95.7 % |
| ROE | 83.0 % | Face Value | 1.00 ₹ | DMA 50 | 1,268 ₹ | DMA 200 | 1,240 ₹ |
| Chg in FII Hold | -0.01 % | Chg in DII Hold | 0.35 % | PAT Qtr | 881 Cr. | PAT Prev Qtr | 753 Cr. |
| RSI | 32.0 | MACD | -23.8 | Volume | 12,07,910 | Avg Vol 1Wk | 14,27,033 |
| Low price | 1,074 ₹ | High price | 1,340 ₹ | PEG Ratio | 6.90 | Debt to equity | 0.10 |
| 52w Index | 48.3 % | Qtr Profit Var | 26.6 % | EPS | 17.2 ₹ | Industry PE | 49.4 |
📊 Financials
- Revenue & Profitability: PAT rose from ₹753 Cr. to ₹881 Cr. (+26.6%), showing strong earnings growth. EPS at ₹17.2 is modest relative to valuation.
- Margins & Returns: ROCE (95.7%) and ROE (83.0%) are exceptionally high, reflecting outstanding efficiency and profitability.
- Debt: Debt-to-equity ratio of 0.10 indicates very low leverage, ensuring financial stability.
- Cash Flow: Strong profitability and low debt support healthy cash flows.
💹 Valuation
- P/E Ratio: 73.0 vs Industry PE of 49.4 → Overvalued compared to peers.
- P/B Ratio: ~50.8 (Price ₹1,203 / Book Value ₹23.7) → Extremely expensive on book value basis.
- PEG Ratio: 6.90 → High, suggesting growth does not fully justify valuation.
- Intrinsic Value: Current price trades above fair value, limiting upside potential.
🏢 Business Model & Competitive Advantage
- Nestlé India operates in FMCG, with strong brands across food and beverages.
- Competitive advantage lies in brand strength, distribution network, and product diversification.
- Dividend yield of 1.12% provides modest shareholder returns.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive near ₹1,100–1,160 range (closer to 52W low of ₹1,074 and below DMA levels).
- Long-Term Holding: Suitable for investors seeking exposure to FMCG growth and brand stability, but accumulation should be cautious due to stretched valuations.
✅ Positive
- Exceptional ROCE (95.7%) and ROE (83.0%) highlight strong efficiency.
- Strong PAT growth (+26.6%) shows earnings momentum.
- DII holdings increased (+0.35%), showing domestic institutional support.
⚠️ Limitation
- High P/E ratio (73.0) compared to industry average.
- Extremely high P/B ratio (~50.8).
- Dividend yield is modest at 1.12%.
📉 Company Negative News
- FII holdings reduced (-0.01%), showing cautious foreign sentiment.
- MACD at -23.8 indicates bearish technical momentum.
- RSI at 32.0 suggests oversold territory, reflecting weak sentiment.
📈 Company Positive News
- PAT improved significantly compared to previous quarter.
- DII holdings increased, signaling domestic confidence.
- Strong brand portfolio continues to drive growth.
🏭 Industry
- FMCG industry benefits from rising consumer demand, urbanization, and brand loyalty.
- Industry PE at 49.4 suggests peers trade at lower valuations, making Nestlé India relatively expensive.
🔎 Conclusion
- Nestlé India is fundamentally strong with exceptional efficiency, brand strength, and consistent earnings growth.
- However, high valuations and modest dividend yield limit aggressive upside.
- Best strategy: Accumulate cautiously near ₹1,100–1,160 range for long-term holding, focusing on brand stability and sectoral growth.