MUMBAI: With volume growth under pressure, Nestle India faces challenges across its product portfolio. With sales growing at under 8% in September quarter, which is lower as compared to the earlier quarters, industry analysts said it indicates a flat volume growth which would have been impacted by a weak demand environment, steep price increases and portfolio renationalization.
We believe the weakness in volumes is likely to persist in the near term as the company looks to re-align its portfolio mix, take on increased competition across the portfolio and navigate a weak demand environment,'' said an IDFC Securities report.
However, the company continues to maintain high operating margins at around 21%. We believe low volume growth resulted from lower off-take by canteen store departments, which continued to result in slower growth across industry. Depreciation provisioning has increased by approximately 86% due to aggressive capacity addition by the company in the last one year. However, we believe the company's presence in the foods segment (where penetration levels are low) has positioned Nestle to take advantage of a shift in demand towards packaged foods,'' said a report by ICICI Securities.
The company's slower sales growth in the last few quarters has been a cause of concern. Increasing competition in the noodles segment has also resulted in a dip in market share in this category. However, we believe Nestle's dominance in the segment and increasing ad-spend would result in garnering newer market (specifically rural) and result in double digit volume growth in calendar year 2013. We expect approximately 12% volume growth in calendar year 2013,'' said the ICICI Securities report.
Nestle has completed its manufacturing expansion which is expected to create enough capacity to generate sales which will determine the company's next leg of growth. Though near term challenges persist, we believe in Nestle's inherent capability to successfully tap the attractive India opportunity in foods over the longer term,'' said IDFC Securities.
A KR Choksey report has maintained a positive outlook on Nestle considering its strong double digit growth despite inflationary pressures. Going forward we expect Nestle's topline & earnings to grow at a CAGR (compound annual growth rate) of 18% over calendar year 2011-13 (estimated),'' the report added.
Anda sedang membaca artikel tentang
Nestle India's slow sales growth a concern: Analysts
Dengan url
http://cegahkeropostulang.blogspot.com/2012/11/nestle-indias-slow-sales-growth-concern.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
Nestle India's slow sales growth a concern: Analysts
namun jangan lupa untuk meletakkan link
Nestle India's slow sales growth a concern: Analysts
sebagai sumbernya
0 komentar:
Posting Komentar