Large Cap FMCG Giant Rallies On Dividend & Stock Split Proposal, Should You Buy?

Shares of large cap company operating in FMCG sector, Nestle India Ltd witnessed a rally of 1.88% in last 1-week as board of directors announced plans to consider interim dividend and stock split. Board of Nestle India will meet on October 19, 2023 to consider interim dividend and sub-division of shares. Last trading price of Nestle India share is Rs 22915.95 per share, with intraday fall of 0.03%. Brokerage firm Axis Securities has assigned buy call with target price of Rs 24,100 apiece. Check details below:

Nestle India To Consider Stock Split & Interim Dividend: According to its BSE filing issued on October 3, 2023, "Meeting of the Board of Directors of the Company is scheduled on 19/10/2023 ,inter alia, to consider and approve Update on board meeting: The Board of Directors of the Company to inter-alia consider the following proposals: a. declaration of second interim dividend for the year 2023, if any; and b. alteration in the share capital of the Company by sub-division/ split of existing equity shares." The company has fixed record date as November 1, 2023, for determining the entitlement of second interim dividend for the year 2023, if any."

Nestle India Dividend History: It declared 68 dividends since 2001. In the last 12 months, Nestle India has declared an equity dividend amounting to Rs 222.00 per share. At the current share price of Rs 22915.95, this results in a dividend yield of 0.97%, according to Trendlyne.

Nestle India Stock Performance & Return: Last trading price of Nestle India share on BSE is Rs 22915.95 per share. Its 52-week high price is Rs 23390.00 per share and 52-week low price is Rs 17,888.00 apiece, respectively. Its market capitalisation is Rs 2,20,945.77 crore. Nestle India stock rallied 1.65% in last 2-weeks, gained 16% in last 6-months, soared 19% in last 1-year, witnessed a surge of 44% in last 3-years, and gained 144% in last 5-years.

Nestle India Valuation: According to Axis Securities, in its report dated September 2, 2023, "We remain positive on Nestle as it 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 110+ products in the last seven years), 3) Premiumisation in the core categories, 4) Entry into new categories of the future (Purina Pet care and Gerber's for toddlers), and 5) Introduction of D2C platform to gauge consumer attention. We recommend a BUY rating on the stock with a near-term TP of Rs 24,100, implying an upside of 10% from the CMP."

Nestle India Financials: The company announced a net profit of Rs 698.34 crore for the quarter ended June 30, 2023, up 37% YoY as against Rs 510.24 crore in the same quarter an year ago, according to its BSE filing. The large cap FMCG company's revenue from operations soared nearly 17% on YoY to Rs 4,658.5 crore in the June 2023 quarter as compared to Rs 4,045.7 crore in the same quarter previous year.

Nestle India About: 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 stock has been picked from the brokerage report of Axis Securities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.