Nestle

NESTLE INDIA Ltd.
Stock Review & Analysis

by Yadnya
TOPICS DISCUSSED
COMPANY MARKET
FINANCIALS
PROFILE OVERVIEW
VALUATIONS GOVERNANCE
©2019 Copyright of Yadnya Academy Pvt. Ltd. | Redistribution Prohibited

COMPANY
PROFILE

MILESTONES
1967
1983
1956 1961 The Co. set up their second
Maggi begins its journey in India
Nestle India Ltd was The company set up their first plant at Choladi in Tamil Nadu to
with its revolutionary “Maggi 2-
incorporated production facility process the tea grown in the
minute Noodles”
area
1991
1990 2000
Entered in joint venture with BM 1995
Entered into the chocolate The company forayed into the
Khaitan group to set up facilities Launched the worldwide famous
business by introducing Nestle Ultra Heat Treated (UHT) liquid
to manufacturing a range of brand chocolate, Kitkat
Premium Chocolate milk market.
Soya based products.
2013
2006 The company acquires 26% 2015 2016
The company set up their minority stake in indocon agro. Nation-wide ban On Nestle’s Re-introduction of Maggi in the
seventh factory at Pantnagar in The company also commences Maggi due to high levels of lead Market after clearing all lab
Uttarakhand export of noodles, sauces from found in the product. tests mandated by the Govt.
New Mangalore Port.

The growth momentum was moderate.
Domestic Sales grew at 11.6% while overall sales grew at 10.2%.
KITKAT, MUNCH, NAN, MAGGI Noodles & Masala-ae-magic were

outperformers within the overall product portfolio.
KEY Market leadership in ~85% of Portfolio
HIGHLIGHTS
Operating margins impacted by headwinds in commodities and
investments in new products
The company is setting up its ninth Maggi plant in Sanand, Gujarat (@

Rs.700 Cr) which would drive faster growth in the western region.
On Rural grounds, the Co. covers around 52,000 villages directly in its
distribution plan and are looking to double it in 2-3 years.

REVENUE
4.2%
Liquid
beverages
10%
22.5%
Confectionery
14%
PORTFOLIO Milk Products
8.5%
MIX
47%
Prepared dishes &

Cooking Aid
29%
15%

Category Products Market Share Position
Infant Cereals Cerelac 96.5% 1st
Infant Formula Lactogen, Nan 66.6% 1st
Tea Creamer Everyday 44.1% 1st
MARKET Instant Noodles Maggi 59.2% 1st

SHARE
Ketchups & Sauces Maggi Sauce 20.5% 2nd
Instant Pasta Maggi Pasta 73.7% 1st

Kitkat, Milkybar &
White & Wafers 63.4% 1st
Munch
Instant Coffee Nescafe 50.5% 1st

PRODUCTS
Nestlé has launched 61 products in the last three years out of which 40-45 have been successful resulting in ~70%
successful innovations with only 10% of total being product withdrawals.
Nestle would change/renovate remaining 20% of the portfolio
Contribution from new launches has grown from 1.5% in 2016 to 3.7% in H1CY19
One of the biggest and most successful launches of the company in the past years has been Milo which is a chocolate
malt beverage
The firm also launched yogurt (Grekyo) last year, after foraying into the breakfast cereals market.
New product launches lead time has been reduced to three to nine months from the otherwise 18-36 months
The company has 12-18 products in line to be launched in 2019

PLACE - Distribution
29 Distribution Centres,
1700+ Cash Distributors,
7000+ Re-distributors,
2600+ Wholesale Hubs
Nestle India has managed to reduce warehouses from 37 to 29

after GST implementation.
The company covers 8,000 towns and 52,000 villages directly

while its total distribution is at 4.6 million outlets with a target to
reach 55-60 lakh outlets
NIL’s 400 kiosks has witnessed 13.5 million footfalls per annum.
The company plans to target 1000 kiosks in the near term

PLACE - Manufacturing
MANUFACTURING PLANTS
A NEW Manufacturing plant is to be set up in Gujarat which will help with the distribution in
the Western region of the country.
PRICES
The price is dependent

Nestle offers a lot of
on the market of each
sizes and package In other products like
individual products. For
options. In Kitkat and Munch, due
example, Nescafe and
supermarkets, you can to tough competition
Maggi being the clear
even find a 16 packet from other companies,
leaders are priced with
Maggi whereas in small Nestle offers competitive
higher margins for the
retail shops, you can find pricing.
company as compared to
5 Rs Maggi.
competition.

PRICES
CATEGORY Nestle India Price Range Competitors Price Range
Noodles Maggi Classic, Maggi Atta Rs.12, Rs.20 Top Raman, Yippee, Rs.10
Patanjali
Pasta Maggi Pasta Rs.25 Sunfeast Pasta Rs.25
Coffee Nescafe Classic(200g), Rs.460, Rs.900 Bru Classic(200g), Bru Rs.320, Rs.570
Nescafe Gold(200g) Gold(200g)
Dairy Whitener Everyday(1Kg) Rs.430 Brooke Bond (1kg) Rs.410
Ketchup Maggi Tomato Ketchup(1 Rs. 147, Rs. 155 Kisan, Heinz Rs.125, Rs. 900
Kg), Maggi Hot &
Sweet((1 Kg)
Food Aid Maggi Masala (100g) Rs.62 MDH Rs. 59-62
Chocolates KitKat, Munch, Milkybar Rs.10-30 Cadbury(Dairy Milk), Rs.10-60*
Amul
Liquid Beverages Milo, Nestea Rs.20-35 Cavin, Hershey Rs.25-35

PROMOTION
Ad spend (in Rs. Cr.) Ø Direct Marketing spends continued to

9 470 500
450 grow faster
8.5 390 400 Ø Sustained investment behind I & R
350
8 7.8% (Information & Referrals)
300
Ø Digital Media spends growing at CAGR of
7.5 7.3% 250
200 ~ 45% for past 4 years.
7
150 Ø Disha Patani (Nescafe), Priya Prakash
100
6.5 Varrier (Munch) and Mary Kom (Nestle
50
6 0 Everyday) are some of the famous
H1' 18 H1' 19
celebrities behind Nestle’s Marketing
Marketing spends % of Domestic Sales
Campaign.

E-COMMERCE
Contribution Of E- Commerce To Domestic Sales of Nestle FUTURE GROWTH (INDUSTRY)

1.50%
1.30% § 35 Crore connected smart-

1.10% phone users.
0.90% § 40 Crore Internet users.
§ Average 4 Crore users added
0.60% annually.
§ 20 Crore e-commerce
shoppers.
2016 2017 H1 2018 2018 H1 2019

MARKET
OVERVIEW

FMCG is the 4th largest sector in the Indian economy.
Growth in Modern trade(distribution to big houses such as

Reliance Mart, Big Bazaar, D-Mart, etc.) is surpassing growth of
general trade(distribution to general retail stores).
FMCG FMCG Sales in India - Household and Personal Care represent

50 % out of which Food constitutes 19%
SECTOR
Rural India accounted for 45 per cent of the total FMCG market.
Nestle India generates only 20-25% revenue through Rural
Population
Total rural income, which is currently at around US$ 572 billion,

is projected to reach US$ 1.8 trillion by FY21. India’s rural per
capita disposable income is estimated to increase at a CAGR of
4.4 per cent to US$ 631 by 2020.

Revenue share of India (FY20E)
Skin Care
5%
Digestives
7%
Haircare
Home care 23%
6%
SECTOR OTC & ethicals
COMPOSITION
9%
Food
Oral care 19%
15%
Health
Supplements
16%
©2019 Copyright of Yadnya Academy Pvt. Ltd. | Redistribution Prohibited Source: ibef.org
KEY TRENDS
India remains the fastest growing economy in the world - economic fundamentals are strong, and reform
momentum continues.
India is estimated to surpass USA to become the 2nd largest economy in terms of purchasing power parity
(PPP) by the year 2040. (Source: PWC Report, 2017).
India is expected to be 3rd largest consumer economy as its consumption may triple to US$ 4 trillion by
2025. (Source: BCG Report, 2017)

KEY TRENDS

NESCAFE BRU TATA COFFEE COFFE DAY
• Nescafe coffee is one of the • Launched by Hindustan Lever • Tata Coffee is the largest • Coffee Day Enterprises’
oldest in the Indian market nearly 50 years ago BRU is producer of Arabica and coffee is the cheapest of the
and still dominates. one of the bestsellers among Robusta parchment of Indian lot.
• The brand was first coffee brands in India origin. • The company today has a
introduced in 1961. • The product is marketed • Its products include green presence in 6 countries
• Nestle Classic, Nestle Sunrise, under the Brooke Bond coffee, and Instant coffee. serving nearly 200 Cr cups of
and Nestle Cappuccino are umbrella brand. • Tata Coffee Grand Instant coffee a year.
some of their bestsellers. • The brand has numerous Coffee is a home grown and • The company not only grows
• Nestle sells its coffee variants including BRU Gold, handpicked coffee from Tata and processes its own coffee,
products at a slightly BRU Select, BRU roast and Coffee plantations. it also makes coffee
premium price compared to BRU Instant, to name a few. machines.
its closest rivals Bru. • Coffee Day Mysore Royal
Coffee Powder has exotic
spicy notes.
• Handpicked coffee comes in a
re-sealable tin
COFFEE INDUSTRY
CADBURY NESTLE AMUL
• British multinational confectionery • Biggest competitor of Cadbury in the • Amul is third in the best chocolate
company owned by Mondelez Indian chocolate market. brands in Indian list.
International since 2010 • The brand holds 18% of the market • Other than being India’s favourite
• Most famous brand in the Indian share brands for milk and milk products,
consumer market for chocolates • Nestle prices its chocolates in budget Amul’s range of chocolates is also
• The bestselling chocolates of range. highly sought after.
Cadbury in India are the Celebrations • Being from Switzerland, the quality • Their production concentrates on
edition, Bourneville, Silk, Perk, Gems, and taste of their variants are of- quality, taste and at affordable rates.
5 Star, and Dairy Milk. course up there with the best in the • Amul chocolates are sold all around
• Most successful product is Dairy Milk World. the world in 189 countries.
which is available @ Rs.5-200. • The wafers crispy bar- KitKat and • Their most loved chocolate is the
• “Silk” is the newest variant of the Munch are the most popular variant Amul Dark Chocolate which is priced
brand, which is quite intense in for Nestle. Some other chocolates reasonably at about Rs100 for 150gm
flavour and is more expensive. include Milkybar and Bar-One chocolate.
CHOCOLATE INDUSTRY
Maggi Sunfeast Yippee Top Ramen Ching’s Secret Knorr Soupy Noodles
• Introduced in 1983. • Sunfeast Yippee, belongs • Top Ramen is • Ching’s Secret is a • Knorr Soupy Noodles is a
• Today Maggi, which was to the Indian manufactured by Nissin. product of Capital Food product of HUL.
initially considered as a conglomerate ITC. • Nissin is a Japanese Indian Limited. • Knorr is famous for its
snack, has taken the • Yippee entered into the company that introduced • Another brand of unique range of soups in
place of a staple diet in Indian market in the its first noodle product in noodles in India India and is the leading
many Indian homes. 2000s. 1958 but entered the produced by Capital Food brand for the same but
• Although the noodle • Yippee! Noodles are Indian market in 1988. India Limited is Smith & has earned accolades for
brand is famous for its available in five different • Different variants of Top Jones. its unique combination of
flagship product, i.e. the variants; namely:- Classic Ramen noodles in India • Ching’s Secret offers a noodles and soup, that is,
classic 2-minute Noodle, Masala, Magic Masala, include Atta Noodles, vast range of products to Knorr Soupy Noodles.
Maggi also has various Chinese Masala, Tricolor Cup Noodles, Curry Veg its customers that • Knorr noodles range
other flavours to offer Pasta (Creamy Corn) and Noodles, Oats Noodles, include Schezwan Instant consists of Mast Masala
such as Atta Noodles, Oat Tricolor Pasta (Masala). Scoopies Short Noodles Noodles, Singapore Curry Soupy Noodles, Knorr
Noodles, Chicken and Super Noodles. Instant Noodles, Hot Chinese Noodle Hot
Noodles, etc. Garlic Instant Noodles, Spicy, Knorr Chinese
Egg Hakka Noodles and Noodle Schezwan,
Veg Hakka Noodles. Chinese Noodles and
Fried Rice.
NOODLE INDUSTRY
Online portals are expected to play a key role.
The Internet has contributed in a big way, facilitating a cheaper and
more convenient means to increase a company’s reach.
The Goods and Services Tax (GST) is beneficial for the FMCG industry
as many of the FMCG products such as Soap, Toothpaste and Hair oil
now come under 18% tax bracket against the previous 23-24% rate.
FUTURE
PROSPECTS With the share of unorganized market in the FMCG sector falling,
the organized sector growth is expected to rise
It is estimated that 40% of all FMCG consumption in India will be

online by 2020.
The online FMCG market is forecasted to reach US$ 45 billion in
2020 from US$ 20 billion in 2017.

FINANCIALS

Quarterly Performance-GROSS SALES
Gross Sales
3,500 12.00%
3,003
3,001
2,939
2,897
10.00%
2,757
10.0%
2,698
3,000
2,601
8.9%
2,514
2,492
2,402
8.00%
2,343
2,266
2,500
6.0% 6.00%
Percentage Change
Gross Sales (Rs. Cr)
2,000 4.7%
4.00%
3.5% 3.7%
1,500 2.00%
0.00% -0.1% 0.00%

1,000
-1.4%
-2.1% -2.00%
500 -3.3% -3.6% -4.00%
0 -6.00%
Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19
Gross Sales Percentage Change in Gross Sales

Quarterly Performance-OPERATING PROFIT
Operating Profit
800 40.00%
738
725
697
697
32.9% 33.9%
700
645
30.8% 30.00%
26.4%
584
551
600
533
20.00%
517
Operating Profit(Rs. Cr)
483
462
Percentage Change
500
12.4%
10.00%
389
400
0.00% 0.00%
300
-5.6%
-8.7% -7.5%
-10.6% -10.00%
200
100 -19.5% -20.00%

-24.0%
0 -30.00%
Operating Profit Percentage Change in Operating Profit

Quarterly Performance-PAT
PAT
500 70.00%
463
446
438
424
450 60.00%
57.4%
395
400 50.00%
343
342
40.00%
350
312
307 35.9% 35.4%
Percentage Change
30.4% 30.00%
278
300
263
PAT (Rs. Cr)
20.00%
250
12.9%
195
10.00%
200
0.00% 0.00%
150 -6.8% -5.4%
-9.0% -10.00%
-14.3%
100 -20.00%
-23.3%
50 -29.9% -30.00%
0 -40.00%
Profit After Tax Percentage Change in Profit After Tax

MARGIN TRENDS
EBITDA MARGINS GROSS MARGINS

Gross Sales
11,292
12,000 25.0%
10,192
10,178
22.1%
20.7% 20.0%
9,475
9,419
10,000
8,614
8,482
15.0%
7,697
11.9% 11.7% 10.8%
Annual
8,000 10.0%
9.3%
8.1%
6,377
7.6%
Percentage Change
Gross Sales (Rs. Cr)
Performance 5.0%
5,222
6,000
- 0.0%
GROSS SALES 4,000 -5.0%
-10.0%
2,000
-15.0%
-16.7%
0 -20.0%
Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18
Gross Sales (crores) Percentage Change in Gross Sales
CAGR: 8%

Operating Profit
3000 30.0%
2618
24.5% 24.8%
23.1%
2500 19.7% 20.0%
17.6%
2097
2032
14.7%
1948
Annual
1829
1825
2000 10.0%
Operating Profit (Rs. Cr)

Performance 6.7%
1555
Percentage Change
1525
4.3%
- 1500 0.0%
1239
OPRATING
995
PROFIT
1000 -10.0%
500 -20.0%
-23.5%
0 -30.0%
Operating Profit (crores) Percentage Change in Operating Profi t
CAGR: 10.16%

PAT
1800 100.0%
1,607
1600 80.0%
77.8%
1400
1,225
60.0%
1,185
1,117
1,068
Annual
1200
1,001
40.0%
Percentage Change
962
31.2%
Performance 1000
PAT (Rs. Cr)

25.0% 22.4%
819
20.0%
17.5%
- 800 11.0%
655
4.6% 6.1%
PAT 0.0%
563
600
-20.0%
400
200 -40.0%
-52.5%
0 -60.0%
PAT (crores) Percentage Change in PAT
CAGR: 9.39%

ROCE
200 100.0%
174.16
180 85.4%
159.56
80.0%
160
60.0%
140
40.0%
120
ROCE (%)
Percentage Change
ROCE (%))
24.4%
89.87
100 20.0%
70.93
7.2%
80 4.2%
62.01
0.0%
57.04
55.76
53.52
53.2
-8.4%
60
-13.7%
-20.0%
28.7
40
-31.0%
-40.0%
20 -43.7%
-48.5%
0 -60.0%
ROCE (%) Percentage Change in ROCE

ROA
40 80.0%
35.11 35.64 64.2%

35 60.0%
30
27.63 40.0%
25 20.3%
22.33
ROA (%) 11.3% 20.8 20.0%

20
19.47 19.53
1.5% 0.3% 17.29
15.53 0.0%
15 -12.8%
-19.2%
-22.5%
9.46 -20.0%
10
5 -40.0%
-51.6%
0 -60.0%
ROA Percentage Change in ROA

Milk Products & Nutrition Prepared Dishes & Cooking Aid
2,650
1,630
%
8.5
15%
2,440
1,420
H1' 18 H1' 19 H1' 18 H1' 19
DOMESTIC
GROWTH Powered & Liquid Beverages Confectionary
590
% 790
4.2
570 5%
22.
640
H1' 18 H1' 19 H1' 18 H1' 19

PRICES
COMMODITY
M M
A A
100
110
120
130
140
100
105
110
80
90
80
85
90
95
R- R-
17 17
M M
A A
Y- Y-
17 17
JU JU
L- L-
17 17
SE SE
P- P-
17 17
N N
O O
V V
-1 -1
JA 7 JA 7
N N
-1 -1
M 8 M 8
A A
R- R-
18 18
M M
A A
Y- Y-
18 18
MILK
JU JU
L- L-
18 18
PALM OIL
SE SE
P- P-
18 18
N N
O O
V V
-1 -1
JA 8 JA 8
N N
-1 -1
M 9 M 9
A A
R- R-
19 19
M M
A A
Y- Y-
19 19
M M
A A
100
105
110
115
100
105
110
80
85
90
95
80
85
90
95
R- R-
17 17
M M
A A
Y- Y-
17 17
JU JU
L- L-
17 17
SE SE
P- P-
17 17
N N
O O
V V
-1 -1
JA 7 JA 7
N N
-1 -1
M 8 M 8
A A
R- R-
18 18
M M
A A
Y- Y-
18 18
JU JU
L- L-
18 18
SE SE
P- P-
WHEAT FLOUR
18 18
GREEN COFFEE
N N
O O
V V
-1 -1
JA 8 JA 8
N N
-1 -1
M 9 M 9
A A
R- R-
19 19
M M
A A
Y- Y-
19 19
VALUATIONS

SHARE
Nestle NIFTY NIFTY FMCG
PERFORMANCE 80%
70%
60%
50%
CMP: 12,159 40%
30%
52 Week L/H: 20%
• 9,047/12,268 10%
0%
-10%
Returns:
-20%
• Nestle=74.5% -30%
• NIFTY=28.2%
8
16
17
17
18
18
19
16
17
18
17
18
19
7
9
t-1
t-1
t-1
r-1
r-1
r-1
g-
b-
g-
b-
g-
b-
c-
c-
c-
n-
n-
n-
Oc
Oc
Oc
Ap
Ap
Ap
De
De
De
Au
Au
Au
Fe
Fe
Fe
Ju
Ju
Ju
• NIFTYFMCG=30.8%

PEER COMPARISON
Nestle India HUL Britannia Inds. GlaxoSmith C H L
Market Cap Rs. 1,14,370 Cr Rs. 3,99,059 Cr Rs. 60,866 Cr Rs. 32,869.6 Cr
PAT (TTM) Rs. 1,688.99 Cr Rs. 6206.9 Cr Rs. 1,161.76 Cr Rs. 1,030.44 Cr
PATM 14.26% 15.79% 10.36% 21.16%
ROCE 70.93% 116.23% 44.31% 39.91%
ROE 45.3% 81.95% 30.25% 25.92%
P/E Ratio 67.72 64.29 52.39 31.9
D/E Ratio 0.01 0.01 0.04 0

Sector: FMCG (FOOD)
VALUATION COMPARISON
Britannia Industries
Nestle India Ltd. HUL GlaxoSmith Kline CHL.
Ltd.
PE 68.33 63.65 51.1 32.52
P/B 29.15 48.32 18.42 7.41
EV Rs.1,13,770 Cr Rs.3,94,862 Cr Rs.57,507 Cr Rs.29,415.25 Cr
EV/EBITDA 36.68 39.26 39.95 16.67
EPS(TTM) 175.18 28.93 46.86 245.02

PE Ratio (Nestle) FMCG(Food) Industry PE
120
99.7
100
80
PE RATIO 61.7
66.7
60
58.1
51.9 49.8 48.4
TREND 37.5
44.7
41.8
37.4
45.1 45.7 43.5
39.5 40.6
40
32.6 30.3 28.4 27.1
20
0
CURRENT NESTLE PE: 68.33

Current FMCG (Food) Category PE: 51.5

VALUATION RATIOS
Mar-19 Mar-18 Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10
Price/Book Value(x) 29.15 22.11 17.71 19.93 21.68 21.56 26.76 31.58 42.78 42.26
Dividend Yield(%) 1.04 1.10 1.04 0.83 0.99 0.92 0.97 1.16 1.28 1.90
EV/Net Sales(x) 9.34 7.41 6.27 6.81 6.20 5.66 5.87 5.45 5.81 4.76
EV/EBITDA(x) 36.68 32.65 28.64 32.88 28.72 25.25 26.26 26.50 28.52 23.71
EV/EBIT(x) 41.53 38.43 35.01 68.15 34.15 30.05 30.98 29.42 31.70 26.58
EV/CE(x) 13.05 10.08 8.41 9.15 10.50 8.16 9.48 9.31 14.20 11.99
M Cap/Sales 9.48 7.56 6.36 6.87 6.24 5.61 5.77 5.35 5.85 4.79

GOVERNANCE

PROMOTERS
NAME Percentage Holding Percentage of pledged shares
Nestle SA 34.28 0%
MAGGI Enterprises Ltd 28.48 0%
Total 62.76% 0%
Ø Nestlé S.A. is a Swiss multinational food and drink processing conglomerate. It is the largest food company in the
world.
Ø Maggi is an international brand of seasonings, instant soups, and noodles that originated in Switzerland in late 19th
century. The Maggi company was acquired by Nestlé in 1947.

MAJOR SHAREHOLDERS
Fund Mar-19 Dec-18 Sep-18 Jun-18
SBI Mutual Fund 0.881% 0.839% 0.837% 0.823%
Axis Mutual Fund 0.765% 0.672% 0.553% 0.283%
IDFC Mutual Fund 0.285% 0.287% 0.241% 0.162%
ICICI Prudential Mutual Fund 0.263% 0.320% 0.240% 0.198%
DSP Mutual Fund 0.252% 0.279% 0.204% 0.019%

PROMOTER HOLDING
Sep-18 62.76% 12.11% 8.09% 17.04%
Dec-18 62.76% 12.36% 7.56% 17.32%
Mar-19 62.76% 12.55% 7.69% 17.00%
Jun-19 62.76% 12.95% 7.55% 16.74%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Promoter FII's DII's Others

BOARD OF DIRECTORS
Top Management Profile Board Composition
Name Designation Experience Tenure at Name Executive or Directorship Company
current Independent held in other
position companies
Suresh M.D&CEO 30 years in the FMCG 4 years Mr. Suresh Executive 2 Nestle
Narayanan Industry, held Narayanan
leadership roles in Mr. Shobinder Executive 1 Nestle
companies like Colgate Duggal
Palmolive and HUL.
Mr. Martin Executive 1 Nestle
Shobinder CFO 29 years of work 15 years
Roemkens
Duggal experience with
Nestlé, also headed Mrs. Rama Independent 5 Consultant
internal Audit for Bijapurkar
Nestle. Mr. Rajya Vardhan Independent 4 CMD – Kanoria
Martin Technical Technical Manager in 3 Years Kanoria Chemicals
Roemkens Director Nestlé’s North East Mrs. Roopa Kudva Independent 2 MD – Omidyar
Africa Region which he Network
successfully led for 4
years Mr. Rakesh Mohan Independent 2 Former RBI Deputy
Governor
Mrs. Swati Ajay Independent 2 Vice Chairperson –
Piramal
Piramal Enterprise
BOARD REMUNERATION
The ratio of the remuneration of each director to the median remuneration of the employees of the Company:
*fixed Salary
(Rs. 11.08 Cr)
(Rs. 4.69 Cr)
(Rs. 4.24 Cr)
The % increase in remuneration of each director, CEO, CFO, and Company Secretary
The % increase in the median remuneration of employees in the financial year: 8.89%.

AUDIT & REMUNERATION COMMITTEE
Audit Committee
Name of Committee members Category of directors Designation Date of Appointment
Ashok Kumar Mahindra Non-Executive - Independent Director Chairman 13-05-2014
Roopa Kudva Non-Executive - Independent Director Member 12-05-2017
Rakesh Mohan Non-Executive - Independent Director Member 14-02-2019
Remuneration Committee
Name of Committee members Category of directors Designation Date of Appointment
Rajya Vardhan Kanoria Non-Executive - Independent Director Chairman 13-05-2014
Rakesh Mohan Non-Executive - Independent Director Member 12-05-2017
Roopa Kudva Non-Executive - Independent Director Member 14-02-2019

CORPORATE SOCIAL RESPONSIBILITIES (CSR)
Being a good corporate citizen means that companies have to be internally well governed and externally responsible.
In other words, CSR and corporate governance are two sides of the same coin.

RETENTION & GENDER BALANCE
OVERALL ATTRITION % WOMEN RECRUITED AS TRAINEES

55% 57%
15%
44%
35%
11%
9% 2016 2017 2018 2019

8.30%
% WOMAN EMPLOYEES
21%
19%
17%
3.70% 16%
2015 2016 2017 2018 2019 2016 2017 2018 2019

Strengths
1. Wide range of products, well Weakness
diversified portfolio. 1. The company lies in the
2. Market leadership across Consumer Food segment due to
almost entire portfolio. which it faces stiff competition
from big brands such as
3. High success rates(70%) with Britannia, ITC, HUL, Dabur and
new product launches now Patanjali.
SWOT
4. Excellent Brand Name
ANALYSIS
Opportunities
1. Increasing purchasing power
Threats
of people thereby increasing
demand 1. Competition from new
entrants Like Patanjali, Ching’s
2. GST to help organized players
Secret etc.
in FMCG Industry
2.Slowing Consumption in India
3. Management’s focus on Rural
can impact financials in short
Market which accounts for only
term
20-25%

DATA SOURCE & DISCLAIMER
Data Source –
Company Website, Accord Equity, Yadnya Research
Disclaimer
We do our best to ensure that the data we publish is complete, accurate and
useful. However, because we do not create the data, and because the processing
required to make the data useful is complex, we cannot be liable for omissions
or inaccuracies. The data and any related materials contained therein are
provided “as is,” without warranty of any kind, either express or implied. The
entire risk of use of the data shall be with the user.
All in the information above is for Information purpose only. Please do not use
the above information as a substitute to Investment/Stock advise and please
contact your Financial advisor for final recommendations.

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NESTLE INDIA Ltd.

Stock Review & Analysis

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Domestic Sales grew at 11.6% while overall sales grew at 10.2%.

KITKAT, MUNCH, NAN, MAGGI Noodles & Masala-ae-magic were

KEY Market leadership in ~85% of Portfolio

The company is setting up its ninth Maggi plant in Sanand, Gujarat (@

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Prepared dishes &

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Infant Formula Lactogen, Nan 66.6% 1st

Tea Creamer Everyday 44.1% 1st

MARKET Instant Noodles Maggi 59.2% 1st

Instant Pasta Maggi Pasta 73.7% 1st

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Nestle would change/renovate remaining 20% of the portfolio

The company has 12-18 products in line to be launched in 2019

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Nestle India has managed to reduce warehouses from 37 to 29

The company covers 8,000 towns and 52,000 villages directly

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The price is dependent

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Ad spend (in Rs. Cr.) Ø Direct Marketing spends continued to

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Contribution Of E- Commerce To Domestic Sales of Nestle FUTURE GROWTH (INDUSTRY)

1.30% § 35 Crore connected smart-

2016 2017 H1 2018 2018 H1 2019

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Growth in Modern trade(distribution to big houses such as

FMCG FMCG Sales in India - Household and Personal Care represent

Total rural income, which is currently at around US$ 572 billion,

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SECTOR OTC & ethicals

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It is estimated that 40% of all FMCG consumption in India will be

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0.00% -0.1% 0.00%

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100 -19.5% -20.00%

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EBITDA MARGINS GROSS MARGINS

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GROSS SALES 4,000 -5.0%

Gross Sales (crores) Percentage Change in Gross Sales

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Operating Profit (Rs. Cr)

Operating Profit (crores) Percentage Change in Operating Profi t

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PAT (Rs. Cr)

PAT (crores) Percentage Change in PAT

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ROCE (%) Percentage Change in ROCE

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35.11 35.64 64.2%

ROA (%) 11.3% 20.8 20.0%

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