Results update for results declared on 19th October 2022

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Nestle, IndusInd Bank, and HDFC AMC

Here are some of the key takeaways from the results

Nestle

• Total Sales of Rs 4,567 crore and sales growth at 18.2% with domestic sales growth at 18.3% in Q2FY23
• Nestle’s Revenue stood at Rs 4,591 crore for Q2FY23, an increase of 18.3% over Rs 3,882 crore in Q2FY22. Sequentially, the revenue is higher by 13.7% from Rs 4,036 crore in Q1FY23
• Nestle’s Profit from Operations at 20.3% of Sales and Net Profit of Rs 668 crore in Q2FY23
• The Board of Directors have declared second interim dividend for 2022 of Rs.120/- per equity share (Face value Rs.10/- per equity share) amounting to Rs 1157.0 crore
• Another significant announcement made by the company was the launch of MyNestle platform. It is the firm's first-ever direct-to-consumer (D2C) platform, with curated product bundles, personalized gifting, subscriptions and discounts

Management Speak

Commenting on the results, Suresh Narayanan, Chairman and Managing Director, “I am delighted to share that we have witnessed the highest sales growth during a quarter in the last five years. This achievement has been on continued strong volume and mix evolution with broad based double-digit growth across all categories. Growth has been very strong in the large metros and mega cities and continued to be robust across smaller town classes including rural markets.”

Our view

Nestle is one of the leading FMCG names and has been a long term wealth creator for investors. The Q2FY23 revenues and net profits are the highest in the last ten quarters. While the stock is in a sideways trend for past few months, the positive results could further drive interest in the stock.

 

IndusInd Bank

• Net Interest Income (NII) grew by 18% YoY to Rs.4,302 crore in Q2FY23 from Rs.3,658 crore in Q2FY22
• Net Interest Margins (NIM) improved to 4.24% as compared to 4.07% for Q2FY22 and 4.21% for Q1FY23.
• Net Profit grew by 57% YoY to Rs.1,805 crore in Q2FY23 from Rs 1,147 crores in Q2FY22
• Deposits grew by 15% YoY to Rs3,15,532 crore in Q2FY23 from Rs.2,75,288 crore in Q2FY22. CASA grew by 15% YoY
• Gross NPA and Net NPA ratios improved to 2.11% and 0.61% from 2.77% and 0.80% YoY respectively
• CRAR as on September 30, 2022 at 18.01 % as compared to 17.37% on September 30, 2021

Management Speak

Mr Sumant Kathpalia, Managing Director & CEO, Induslnd Bank said: "Indian economy continues to be amongst the best performing economies even in the wake of external disturbances and tightening monetary conditions. During the quarter, the Bank saw consistent improvement across our key business units both in terms of growth and asset quality. Our deposits grew by 15% whereas loans grew by 18% YoY. The loan growth was broad-based across consumer and corporate portfolios. Our operating profit margins continue to be amongst the best in the industry supported by NIM expanding to 4.24% from 4.21% QoQ.

Our View

IndusInd Bank is one of the better performing private sector banks and its Q2FY23 results delivered the highest revenues and net profits in the last ten quarters. The Bank is in the buying zone on both the short and long term time frame on the Univest app. Investors looking at the banking space could consider this as one of the stronger banks in the banking sector.

HDFC AMC

Q2FY23:

• The Operating Profit for Q2FY23 was Rs 3,889 million as compared to Rs 3,954 million for Q2FY22
• PBT (Profit before tax) for Q2FY23 was up by 7% to Rs 4,931 million as compared to Rs 4,615 million for Q2FY22.
• PAT (Profit after tax) for Q2FY23 was Rs 3,641 million as compared to Rs 3,445 million for Q2FY22, a YoY increase of 6%

H1FY23:

• The Operating Profit of the company for the H1FY23 was flat at Rs 7,626 million as compared to Rs 7,606 million for H1FY22
• PBT (Profit before tax) for H1FY23 was Rs 8,781 million as compared to Rs 9,276 million for H1FY22
• PAT (Profit after tax) for H1FY23 was Rs 6,783 million as compared to Rs 6,899 million for H1FY22

Our View

HDFC AMC has been performing poorly over the last few quarters. The reasons range from a highly competitive environment with newer players taking away market share from long standing players like HDFC AMC. Another factor affecting all AMCs and not only HDFC AMC is the growing investor preference for passive funds over active funds. While AMCs earn good margins from active funds, passive fund margins are negligible. Overall a sector that can be avoided at this point of time.

 

ABOUT THE AUTHOR

Ketan Sonalkar (SEBI Rgn No INA000011255)

Ketan Sonalkar is a certified SEBI registered investment advisor and head of research at Univest. He is one of the finest financial trainers, with a track record of having trained more than 2000 people in offline and online models. He serves as a consultant advisor to leading fintech and financial data firms. He has over 15 years of working experience in the finance field. He runs Advisory Services for Direct Equities and Personal Finance Transformation.

Note – This channel is for educational and training purpose only & any stock mentioned here should not be taken as a tip/recommendation/advice

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