1:10 Stock Split, 700% Dividend In 2024; FMCG Nestle Buzzing With Bulls; Axis Securities Recommend BUY

FMCG giant Nestle India was the top performer on Sensex during the trading session of Monday despite the broader market being volatile. Notably, Nestle is among the top picks for buying in March month by Axis Securities. The brokerage remains positive as Nestle consistently delivered a resilient performance.

Year-to-date, apart from healthy Q3 earnings, Nestle has also done some major transformations in its stock prices. In January 2024, Nestle turned ex-split for the first time in the ratio of 1:10. Later on, the company also turned ex-dividend for the first one after ex-split, but it was the company's third interim dividend for FY24 in February 2024.

Nestle shares have rallied as much as 2.7% on Sensex to hit an intraday high of Rs 2,630 apiece. At the time of writing, the stock performed at Rs 2,608.95 apiece, up by 2%. Its market cap was over Rs 2.51 lakh crore.

YTD, Nestle's share price have seen a single-digit marginal drop of 4.7%. But in six months, the stock has gained by 18% on BSE, and in a year, the upside is more than 42%. But in 5 years, Nestle has emerged as a multibagger with gains of nearly 153% as of now.

Nestle Results:

In Q3FY24, Nestle's total sales stood at Rs 4583.6 crore. Total Sales Growth stood at 8.3%, while Domestic Sales Growth was at 8.9%. Profit from Operations was at 21.9% of Sales. Meanwhile, the company earned a net profit of Rs 655.6 crore.

Nestle Dividend:

Nestle announced a third interim dividend of Rs 7 per share of the face value of Re. 1/- each for the Financial Year 2023-24 on the entire issued, subscribed and paid-up share capital of the Company of 964,157,160 equity shares of nominal value of Re. 1 each.

The third Interim Dividend for the Financial Year 2023-24 was paid on and from 5th March 2024 to those members whose names appear in the Register of Members of the Company and as beneficial owners in the Depositories, as on the Record Date fixed for the purpose i.e., 15th February 2024.

That being said, only those investors were eligible who held shares of Nestle by the end of February 15.

Nestle Stock Split:

On January 5, 2024, Nestle's equity shares are sub- divided, such that 1 (one) equity share having a face value of Rs. 10/- (Rupees ten only) each, fully paid-up, stands sub-divided into 10 (ten) equity shares having a face value of Re. 1/- (Rupee one only) each, fully paid-up, ranking pari-passu in all respects.

The ratio was 1:10 for a stock split.

BUY Nestle Shares In March 2024?

In its March 2024 picks report, Axis Securities said, "We remain positive on Nestle as it has consistently delivered resilient performance, led by 1) Efforts towards rural penetration and market share gains through the RURBAN strategy, 2) Constant focus on innovation (launching 125 products in the last seven years), thereby leading growth, 3) Driving premiumisation in the core categories (Maggi noodles range) and launching differentiated products, 4) Entering into new categories of the future (Purina Pet care and Gerber's for toddler nutrition), and 5) Introducing D2C platform to gauge consumer attention."

Axis Securities believes that Nestle has all the right levers for growth in the long run. Accordingly, the brokerage has set a target price of Rs 2,880 on Nestle while recommending to buy. This implies a nearly 11% potential upside in Nestle ahead.

Nestle India manufactures and markets a wide range of food and beverage products including milk and milk products, coffee, tea, noodles, chocolates, confectionery, and infant nutrition. Some of its popular brands in India include Maggi, Nescafe, KitKat, MilkyBar, and Nestle Everyday. Furthermore, it recently acquired Purina Petcare to enter into the pet care business and launched Gerber Cereals to drive the premiumisation agenda. The company operates a robust distribution network (5.1 Mn outlets) that covers both urban and rural areas of India.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.