Nestlé Q4 preview: PAT can fall 5% as a cost expense, damages demand

The leading consumer brand Nestlé will probably see the revenue growth of MID mid-Single digits, which runs by double-digit growth in drinks. However, profitability is likely to be muted. The company’s development is being affected by the price of mute urban demand and elevated commodity, which is partly from some advantages in Maggie Portfolio due to Maha Kumbh 2025. Is excited.

In the fourth quarter, net profit is declining by 5% year-by-year (yoy), according to the average estimate of six brokerage. On the flip side, the revenue may increase by 5%.

Analysts predict strong drinks in the back of the price -led development in coffee. However, the dairy business remained under stress.

The total margin is likely to contract with 131 BPS yo while the high A&P costs 113 BPS yo will lead to EBITDA margin contraction.

Here’s what analysts expect from Q4:

Kotak equity

We expect a 5.4% Yoi revenue growth in the domestic/export markets leading to 5.3% Yoy growth. We expect the volume to grow 3%, 2% opposite in 3Q. Price mix growth is governed by price rise in chocolates, coffee and maggie.

Gross margins can compress 185 BPS U by 55%, affected by sharp inflation in coffee, cocoa and edible oils (in the range of 50-70% yoy). We expect eBitda margin to be 23.5%to 190 bps yoy. Overall, we expect EBITDA will decrease by 2.4% yoy, but PAT reduction may be higher due to other income (low cash balance after RS7 BN investment in JV with DR Reddies).

Novels

We consider a unified income to grow 5% yoy. Domestic sales are likely to be 5-6% yoy, while domestic volume will increase by 3% yoy. Overall demand trends in urban areas have been given a gradual marginal recovery – though the recession is still ongoing.

Export revenue is likely to be 7% yoy. We expect 2% in Q4FY25 (1% in Q3fy25; 4% in Q4fy24) mainly led by coffee, but portfolio (eg.

We consider EBITDA to grow 2.6% yoy due to a high -rise base. The cost of cocoa, coffee and palm oil remains for inflation, Gross/EBITDA margin is likely to reduce 20 bp yoy 57%.

Motilal Oswal

We expect a sales growth of 5% yoy. However, while the demand is undergoing a recovery of demand, more dependence on urban markets can weigh on on the quantity of nests. The company has implemented the price hike in response to rising commodity prices.

We are GP. Modeling moderation in (-100 bps) and EBITDA margins (190 bp), which is affected by a sharp rise in coffee and edible oil prices.

Nestlé focuses on its distribution access, premiums and expanding innovations.

(Connection: The recommendations, suggestions, opinions and opinions provided by experts have their own. This does not represent opinions of economic time)