During the October-December period, the firm jumped 15.5 per cent as against a 25 per cent rise in S&P BSE Sensex
and 14 per cent gains in BSE FMCG index.
Commentary on recovery in trade channels and rural demand, new product pipeline and demand trends in packaged foods are among the key monitorables, according to analysts at HDFC Securities.
The firm, which follows January-December financial year, on February 9, 2021, informed exchanges that the board may consider a final dividend on February 16 when it would report its quarterly numbers.
The Maggi noodles maker is expected to post double-digit revenue growth in its profit after tax (PAT) for the fourth quarter of the financial year 2020.
Sanjay Manyal, research analyst at ICICI Direct expects PAT to come in at Rs 552.1 crore, up 16.7 per cent YoY, but down 6 per cent quarter-on-quarter (QoQ). The firm had posted a net profit of Rs 473 crore in the same period last year and Rs 587 crore in the preceding quarter.
Brokerage Phillip Capital has similar PAT projection of Rs 549.1 crore that translates into 16.2 per cent growth yearly but a contraction of 6 per cent sequentially.
Analysts at Nirmal Bang, meanwhile, have the loftiest outlook of all of 19.7 per cent YoY growth in PAT.
Sales growth during Q4FY20 will be driven by continuing increase in in-home consumption and festive season, said analysts at Emkay Global Research who see a 10 per cent jump in revenue at Rs 3,478.6 crore from Rs 3,149.3 crore posted in the same period last year.
Meanwhile, on a QoQ basis, the revenue is likely to slip by 2 per cent from Rs 3,541.7 crore posted in the preceding quarter of FY20.
Brokerage ICICI Direct has pegged revenue growth at 13 per cent YoY and 0.5 per cent QoQ at Rs 3,558.7 crore. "We expect Nestle to witness strong 13% sales growth on the back of an increase in inventory levels at the distributor end. Our channel check suggests that October sales were strong and November-December sales were muted. However, distributor level inventories have gone up 7-10 days," the brokerage said.
Meanwhile, analysts at HDFC Securities model an 11 per cent YoY revenue growth, led by continued demand for packaged foods.
Views on margin
Brokerage HDFC Securities expects 73 bps YoY expansion in gross margin on account of favourable base and product mix. "We model EBITDA margin expansion of 122 bps YoY to 23.5 per cent," it added.
Meanwhile, brokerage Phillip Capital said that benign milk prices are likely to drive gross-margin expansion while healthy operating leverage and cost-efficiency programme will boost EBITDA (earnings before interest, tax, depreciation and amortization) margin. It sees margin expansion of 118 bps YoY to 23.3 per cent.