Is it right to invest in Nestle? Buy, sell or Hold - Learning sharks-Share Market Institute

Checked by: Vijay Verma

NESTLE started doing business in India in 1912, importing and selling finished goods there. The business gradually increased its presence in India. Are you holding this stock?

The company has maintained its share capital and its continuous supply of FMCG made this stock a multi-bagger. If anybody had invested in this stock in 2010, this stock would have given 600% growth along with Dividends and bonuses.

Nestle CMP is Rs20338 as of Dec 13 which is almost its all-time high. Ideally is it not advised to make a new entry at this point of time? While looking at the NIFTY 50 CMP 18608 again at its all-time high suggesting the stocks would see resistance at this level.

Let’s look at the technical analysis of the stock.

Nestle stock price chart – Technical analysis

Looking at the technical analysis of the stock, the stock seems to be touching the upper band of the channel. Another entry can be taken somewhere around the support.

let’s look at the fundaments of this stock

Quarterly Results Figures in Rs. Crores

	Sep 2019	Dec 2019	Mar 2020	Jun 2020	Sep 2020	Dec 2020	Mar 2021	Jun 2021	Sep 2021	Dec 2021	Mar 2022	Jun 2022	Sep 2022
Sales +	3,216	3,149	3,325	3,050	3,542	3,433	3,611	3,477	3,883	3,739	3,981	4,037	4,591
Expenses +	2,449	2,455	2,532	2,303	2,658	2,656	2,681	2,629	2,935	2,874	3,056	3,217	3,580
Operating Profit	766	694	793	748	884	777	930	848	948	866	925	819	1,011
OPM %	24%	22%	24%	25%	25%	23%	26%	24%	24%	23%	23%	20%	22%
Other Income +	56	45	43	38	34	31	30	29	34	-209	21	19	31
Interest	32	31	41	41	40	42	54	52	52	44	36	37	37
Depreciation	91	94	91	92	91	96	94	95	96	106	104	102	98
Profit before tax	700	614	704	652	786	670	812	730	834	507	806	700	906
Tax %	15%	23%	25%	25%	25%	28%	26%	26%	26%	24%	26%	26%	26%
Net Profit	595	473	525	487	587	483	602	539	617	387	595	515	668
EPS in Rs	61.74	49.02	54.50	50.47	60.89	50.13	62.46	55.86	64.03	40.10	61.68	53.45	69.32
Raw PDF

Profit & Loss

Figures in Rs. Crores

	Dec 2010	Dec 2011	Dec 2012	Dec 2013	Dec 2014	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021	TTM
Sales +	6,255	7,515	8,335	9,101	9,855	8,175	9,141	10,010	11,292	12,369	13,350	14,709	16,348
Expenses +	5,016	5,990	6,509	7,153	7,816	6,620	7,292	7,913	8,675	9,443	10,149	11,118	12,727
Operating Profit	1,239	1,525	1,825	1,948	2,039	1,555	1,850	2,097	2,618	2,926	3,202	3,592	3,620
OPM %	20%	20%	22%	21%	21%	19%	20%	21%	23%	24%	24%	24%	22%
Other Income +	35	21	31	97	87	-391	140	177	259	247	146	-116	-138
Interest	1	5	27	37	14	3	91	92	112	129	164	201	153
Depreciation	128	153	277	330	338	347	354	342	336	370	370	390	410
Profit before tax	1,145	1,388	1,553	1,678	1,774	814	1,545	1,839	2,429	2,673	2,813	2,884	2,920
Tax %	29%	31%	31%	33%	33%	31%	35%	33%	34%	26%	26%	26%
Net Profit	819	962	1,068	1,117	1,185	563	1,001	1,225	1,607	1,968	2,082	2,145	2,165
EPS in Rs	84.91	99.73	110.76	115.87	122.87	58.42	103.86	127.07	166.67	204.16	215.98	222.46	224.55
Dividend Payout %	57%	49%	44%	42%	51%	83%	61%	68%	69%	168%	93%	90%

Balance Sheet

Figures in Rs. CroresCORPORATE ACTIONS

	Dec 2010	Dec 2011	Dec 2012	Dec 2013	Dec 2014	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Jun 2022
Share Capital +	96	96	96	96	96	96	96	96	96	96	96	96	96
Reserves	759	1,178	1,702	2,272	2,741	2,721	3,186	3,324	3,577	1,822	1,923	1,988	2,232
Borrowings +	0	971	1,050	1,189	20	18	33	35	35	189	147	266	280
Other Liabilities +	1,703	2,157	2,315	2,756	2,963	3,251	3,495	3,907	4,379	5,065	5,733	5,860	6,007
Total Liabilities	2,558	4,402	5,164	6,314	5,820	6,086	6,810	7,363	8,088	7,173	7,900	8,210	8,616
Fixed Assets +	1,013	1,576	3,204	3,369	3,177	2,898	2,730	2,616	2,401	2,341	2,179	2,994	3,054
CWIP	349	1,372	344	295	245	231	188	94	105	143	639	246	197
Investments	151	134	365	851	812	1,325	1,756	1,979	2,658	1,751	1,464	774	809
Other Assets +	1,046	1,320	1,251	1,799	1,586	1,633	2,136	2,673	2,924	2,937	3,618	4,196	4,556
Total Assets	2,558	4,402	5,164	6,314	5,820	6,086	6,810	7,363	8,088	7,173	7,900	8,210	8,616

Cash Flows

Figures in Rs. Crores

	Dec 2010	Dec 2011	Dec 2012	Dec 2013	Dec 2014	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021
Cash from Operating Activity +	1,037	1,158	1,693	1,796	1,644	1,098	1,466	1,818	2,052	2,295	2,454	2,271
Cash from Investing Activity +	-446	-1,528	-941	-441	-432	-70	-126	-131	-52	83	-321	-1,957
Cash from Financing Activity +	-544	323	-513	-580	-1,635	-498	-666	-997	-1,317	-3,602	-1,956	-2,019
Net Cash Flow	47	-47	239	775	-423	529	674	691	683	-1,223	177	-1,704

Ratios

Figures in Rs. Crores

	Dec 2010	Dec 2011	Dec 2012	Dec 2013	Dec 2014	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021
Debtor Days	4	6	4	3	4	4	4	3	4	4	5	4
Inventory Days	82	89	86	79	82	103	107	91	92	107	107	111
Days Payable	106	92	63	68	71	94	91	99	118	124	115	122
Cash Conversion Cycle	-20	3	28	14	15	12	20	-5	-22	-14	-3	-7
Working Capital Days	-51	-14	-11	-17	-13	-21	-10	-15	-21	-19	-21	-15
ROCE %	161%	90%	62%	53%	56%	46%	54%	57%	71%	96%	139%	147%

Shareholding Pattern

Numbers in percentagesDEALS / TRADES

8 recently

	Dec 2019	Mar 2020	Jun 2020	Sep 2020	Dec 2020	Mar 2021	Jun 2021	Sep 2021	Dec 2021	Mar 2022	Jun 2022	Sep 2022
Promoters +	62.76	62.76	62.76	62.76	62.76	62.76	62.76	62.76	62.76	62.76	62.76	62.76
FIIs +	12.07	11.81	12.10	11.51	12.84	12.29	12.43	12.31	12.35	12.01	11.65	12.05
DIIs +	8.92	9.12	8.71	8.91	7.75	7.95	7.92	7.99	7.89	8.60	9.14	8.86
Government +	0.07	0.07	0.07	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Public +	16.18	16.24	16.36	16.82	16.65	16.99	16.88	16.93	16.99	16.62	16.45	16.33

Overall the company seems good to hold. However, It might take a healthy correction. If you wanna learn about the course check out our courses page.

#stockmarket #sharemarket #nestle

Update – 15-04-23

Current Market price is 19465

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