World Chocolate Day: This company manufactures the most desirable chocolate KitKat.
Company’s Kit Kat chocolate has also won India’s most desirable chocolate bar brand in the year 2022.
Company Overview
Nestle India Ltd is an India-based company primarily involved in the food business. The company's product groups include Milk Products and Nutrition, Prepared Dishes and Cooking Aids, Powdered and Liquid Beverages, and Confectionery.
The Milk Products and Nutrition product group includes dairy whitener, condensed milk, ultra-heat treatment milk, yogurt, maternal and infant formula, baby foods, and healthcare nutrition. The Prepared Dishes and Cooking Aids product group includes noodles, sauces, seasonings, pasta, and cereals. The Powdered and Liquid Beverages product group includes instant coffee, instant tea, and ready-to-drink beverages. The Confectionery product group includes bar countlines, tablets, and sugar confectionery.
The company’s Kit Kat Chocolate has also won India’s most desirable chocolate bar brand in 2022 at the 8th edition of TRA’s most desirable brand.
The company manufactures products under brand names such as Nescafe, Maggi, Milky Bar, Kit Kat, BAR-ONE, MILKMAID, and NESTEA. It also offers daily consumption products such as Nestle Milk, Nestle Slim Milk, Nestle Dahi, and Nestle Jeera Raita.
Share Performance
On the occasion of World Chocolate Day, the stock of Nestle India commenced trading at Rs 22,999, representing a 0.42 per cent increase from the previous day's closing price of Rs 23,096.55. Eventually, it concluded the day at Rs 22,882.20 on the BSE. The stock's 52-week high and low are Rs 23,388.95 and Rs 17,888, respectively. Currently, its market capitalization stands at Rs 220,620.37 Crore.
Over the past year, the stock has delivered a decent return of 26 per cent. In the last five years, it has achieved a remarkable return of 130 per cent.
In terms of ownership, the promoters hold 62.76 per cent of the company's shares, while foreign institutional investors (FIIs) and domestic institutional investors (DIIs) hold 12.06 per cent and 9.19 per cent, respectively.
Financials Performance
In the first quarter of 2023, Nestle India experienced a surge in revenue by 21 per cent, from Rs 3,993 Crore to Rs 4,831 Crore. The company's operating profit for the same quarter amounted to Rs 1,095 Crore, with an operating profit margin of 23 per cent. Additionally, the net profit for the first quarter of 2023 reached Rs 737 Crore.
Nestle India follows a financial year that ends on December 31 every year. When analysing the company's financials for the entire year, the annual revenue witnessed a substantial increase of 14.63 per cent, rising from Rs 14,741 Crore to Rs 16,897 Crore. The operating profit for the year amounted to Rs 3,706 Crore, with an operating profit margin of 22 per cent. Furthermore, the net profit for the year is Rs 2,391 Crore.
Notably, Nestle India achieved a significantly high return on capital employed (ROCE) at 138 per cent and a return on equity (ROE) at 108 per cent.
Asper the management, all the product groups delivered double-digit growth, a notable feature in these past four quarters in a row. Confectionery led by KITKAT, and MUNCH posted strong growth, supported by consumer-led campaigns, innovation, and engagement. Furthermore, Nestle India delivers the highest growth in the last decade.
Given the impressive historical financials and consistent growth of the company, it has the potential to provide significant returns in the future to its investors. Investors must keep this company on their watch list.