Nestle, Bajaj Auto & TCPL are 3 Nifty cos to share March quarter results today. Here're results previews

Nestle India, Bajaj Auto and Tata Consumer Products Limited (TCPL) are three Nifty companies that will disclose their March results today. Among the three Nifty constituents, Nestle India is seen reporting a 13-20 per cent jump in profit on a double digit rise in sales; tea and coffee producer TCPL may report a muted bottom line despite a double digit rise in sales, analysts said. Two-wheeler major Bajaj Auto, meanwhile, is seen clocking double digit growth in profit despite sharp drop in volumes, thanks to a jump in realisation.

Nuvama Institutional Equities said TCPL and Nestle are leaders in their respective segments; they command strong pricing power, vast distribution capability and robust brand-building capabilities, allowing them to not only post robust growth, but also continue to grow their profitability.

This brokerage expects Nestle India to report 13.7 per cent YoY rise in profit at Rs 676.30 crore for the first quarter (FMCG major follows calendar as financial year) on a 10 per cent YoY rise in sales a Rs 4,380 crore. Margin is seen expanding to 23.2 per cent against 22.9 per cent sequentially. Domestic volumes are seen growing 4 per cent on base of 9 per cent YoY.

"Rural is expected to do well for Nestle, despite overall weakness as noodles and biscuits are the categories that have remained more resilient than other categories. However, milk prices remain high, which shall impact margins in dairy and confectionery products," Nuvama said.

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Motilal Oswal expects growth momentum in sales to taper off compared to preceding quarters and sees higher contribution from out-of-home consumption. Watch out for any commentary on the milk and nutrition segment and raw material costs.

This brokerage said tea prices and volumes will be key monitorable for Tata Consumer, as it sees tea volume growth for the quarter to be at 1 per cent. Expect international beverages segment to report muted due growth to inflationary environment, it said while expecting India Foods business to grow 26 per cent YoY.

Nuvama sees TCPL to log 5.1 per cent YoY rise in profit at Rs 248.30 crore on 12 per cent rise in sales at Rs 3,556 crore. Margin is seen at 13 per cent, flat sequentially. Volume for this FMCG firm is seen growing 5 per cent YoY against 4 per cent in December quarter. Elara sees profit for Tata Consumer falling 6.7 per cent YoY to Rs 220.30 crore on 10.9 per cent rise in revenue at Rs 3,520 crore.

"The India tea business has been a laggard for the past few quarters, and we expect a gradual recovery with positive volume growth of 4 per cent YoY (aided by proactive steps and promotions)/value growth of 1 per cent YoY," Nuvama said adding that the "unbranded business of Tata Coffee has been doing well, but would slow down vis-à-vis previous quarters due to decline in coffee prices."

In the case of Bajaj Auto, Emkay Global expects profit to jump 12.4 per cent YoY to Rs 1,378.50 crore on 5.1 per cent YoY rise in revenue at Rs 8,385 crore, with Ebitda margin expanding 196 basis points YoY to 19.1 per cent. Prabhudas Lilladher pegs profit at Rs 1,356 crore, up 10.8 per cent. Sales, it said, may rise 4.3 per cent YoY to Rs 8,319 crore.

"Revenue to grow YoY, despite decline in volumes (down 12 per cent), owing to increase in realisations (up 20 per cent). Realisation to improve due to better mix (higher domestic 2W and 3W mix), price hikes and rupee depreciation. Ebitda margin to expand YoY due to price hikes, better mix and INR depreciation. On QoQ basis, Ebitda margin to remain unchanged as impact of the price hike is negated by the adverse scale," Emkay said.

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