Nestle Q2FY22 Earnings Result Preview: Fast Moving Consumer Goods (FMCG) major Nestle India Limited is expected to report a 10.2 per cent Year-on-Year (YoY) growth in its revenues at Rs 3,885 cr for the quarter ended 30 September 2021, according to estimates by ElaraCapital. On the Quarter-on-Quarter (QoQ) basis, it is expected at 12.2 per cent.  

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Meanwhile, Yes Securities sees an 11.5 per cent YoY growth at Rs 3,948.50 for the reporting quarter. Sequentially it is expected to be up by 13.6 per cent. “Nestle should see strong topline growth of 12% on a strong base of 10% growth, margins to remain stable with strong mix and limited RM inflation,” the report said.  

Nestle will be announcing its Q2FY22 results on Tuesday.  

3 things to watch out for:  

  1. Q2FY22 Revenue – While ElaraCapital estimates a 10.2 per cent growth, Yes Securities sees an 11.5 per cent jump.  
  2. Net Profit – PAT is seen at Rs 649.70 cr, up 10.7 YoY and 20.6 per cent sequentially by Yes Securities. ElaraCapital sees recurring net profits at Rs 654.4 cr, up 11.5 per cent YoY and 21.5 per cent sequentially.  
  3. Earnings Before Interests, Taxes, Depreciation and Amortisation or EBITDA is seen at Rs 929.4 cr, up 12.4 per cent YoY and 18.9 per cent on QoQ basis. Yes Securities sees EBITDA at Rs 987.7 cr. 

The shares of Nestle India ended at Rs 19,400 on the NSE, up 0.4 per cent from the last closing price on Thursday.

Sector trends and outlook: 

- Elara: FMCG universe to report value/volume growth of 8.8 per cent/4.9 per cent YoY in Q2FY22E with Q2FY22E average realisations anticipated to grow 5 per cent YoY, led by price hikes amidst steep inflationary scenario. 
- EBITDA margins of FMCG universe to contract 90bp YoY in Q2FY22E as calibrated price hikes and overhead cost control only partially offset input cost inflation. 

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