Nestle India surges ; Analysts bet on revival in Maggi market share
Shares of Nestle IndiaBSE 6.51 % surged up to 3 per cent in Friday trade despite the company reporting a 19.1 per cent decline in Q1 net profit to Rs 259 crore from Rs 320 crore following the dent on its Maggi noodles market. The company’s net sales for the quarter under review declined 8.5 per cent to Rs 2,296 crore from missing analyst estimates.
Reacting to the earnings, the scrip rose 2.82 per cent to hit a high of Rs 5,865 on the BSE. The stock is rallying on account of expectation of market share improving in the coming quarters, investment bank Morgan Stanley said.
Brokerage firm Credit Suisse said, “Q1 results signal stabilisation in business with first full quarter of Maggi sales.”
Decline in domestic FMCG business revenue was led by continuing impact of Maggi ban. Business was unable to absorb fixed costs with sluggish revenue growth,
The investment bank has maintained an underweight stance on the stocks with price target of Rs 5,370.
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