I think fair value for nestle is 1500-1600..around 20-22 times is fair enough for a growth of 15-20%...anything more than is over priced..sell..expect a substantial correction..should settle around 1800-2000
Dec qr profit of Nestle is due to one time provision for employee cost ( approx Rs 40 cr) and due to higher sales promotion expenses by about Rs 40 cr. If we add Rs 80 CR to profit, the results would have been spectacular.
Results of March quarter would be again excellent and prices will again touch Rs 2800/-DO not sell NESTLE.It is top grade management .It has delivered consistent growth for 11 quarters and hence set back in one quarter should not be a cause for alarm. EPS for next year should be in range 80-90 with about25%-30% growth in net profits.
You reading of the stock is great. It has touched almost 2800 How do you rate the long term prospects of Nestle ? Upto now it has out performed most other stocks. When would it be a good time to add to my holding?
Nestle results for march quarter are good looking into food inflation. Government will also do its best to reduce food inflation.Nestle will gradually increase product prices in a staggered way to keep its margin intact.Imagine a 5% increase in product prices can increase top line by 250 cr.Also as the food inflation decreases, the input costs will reduce considerably.We need to have patience with this stock and its performance should be judged on annual basis rather than on quarterly basis.This is stock for our children and grandchildren. The food sector has a great potential in India and with standard of living rising in India, the demand for Branded Food would be excellent. Nestle is one of the best brands and its management is top class.The average sales outstanding of NESTLE is just 4 days .How many companies in India, can boast of such low debtors?It should be bought in the range Rs 2500/- to Rs 2550/-Invest in Nestle and sleep. Minimum 20% p.a return is likely for years
Possibly Rs 2500/- should be the bottom for Nestle. It is not possible to predict whether it will fall to this level because long term investors tend to buy NESTLE at all dips...Fundamentally it is a strong company and for long term players it a buy even at present levels for minimum one year holding..