Hem Securities has reiterated a buy rating on Nestle India with target price of Rs 1925 in its April 11, 2009 research report.
“With inflation coming under control, raw material prices cooling off and excise duty cut has help FMCG companies to maintain its margin. Nestle having a wide portfolio of products and continuous addition of new products under its umbrella will continue to enjoy brand preference from health conscious customers. We are very positive on the long term business prospects of the company and financial performance. At Current Market Price of Rs 1621.45 and with FY08 and FY09E EPS of Rs 55.39 and 72.10, the stock is trading at a PE of 29.3x and 22.5x respectively. We reiterate “BUY” on the stock with target price of Rs 1925 with a medium term investment horizon. It gives an upside potential of Rs 304 or 19%,” says Hem Securities’ research report.
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