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Nestle has come up with Milkmaid Creations, a new range of powdered
dessert mixes, targeting the large Indian traditional sweet market. The
product will target the convenience‐seeking consumers besides offering
an eggless cake (for India’s large vegetarian population). Once again,
Nestle has capitalized on its core competence of a quick turnaround (10‐
15 min for a dessert would be attractive). The launch also indicates that
supply constraints for the company are getting addressed gradually (we
had pointed at Nestle upping the ante in terms of new products in our
sector report ‘India Food Guide’ dated 17th Feb 2012). Cadbury (Kraft) is
also trying to capture a slice of this pie by promoting chocolates as a
substitute for sweets. Nestle remains the best play on Indian Food
segment, but maintain ‘HOLD’ as the stock is fairly valued over near term.
Milkmaid comes out of relative inactivity, savors sweet market
Nestle Milkmaid has launched Milkmaid Creations, a new range of powdered dessert
mixes. The range includes five variants‐eggless cake, ‘pista kulfi’, ‘besan laddoo’,
‘badaam kheer’ and ‘rice kheer’. The price bracket is INR95‐INR145. The desert mix
range is currently available at select outlets in 54 cities across the country.
Changing demographics to bolster growth for ready to cook
With the changing socio‐economic pattern and increasing number of working couples,
the concept of convenience food is fast becoming popular in India for saving time and
effort. The ready to cook segment is growing at ~25% CAGR.
Outlook and valuations: Fairly valued; maintain ‘HOLD’
We are optimistic about this launch as Nestle understands Indian consumers (R&D unit
coming up) and their taste preferences well. The stock is trading at 36.4x and 30.2x
CY12E and CY13E EPS, respectively. We maintain ‘HOLD’ with ‘Sector performer’ rating
on relative return basis.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Nestle has come up with Milkmaid Creations, a new range of powdered
dessert mixes, targeting the large Indian traditional sweet market. The
product will target the convenience‐seeking consumers besides offering
an eggless cake (for India’s large vegetarian population). Once again,
Nestle has capitalized on its core competence of a quick turnaround (10‐
15 min for a dessert would be attractive). The launch also indicates that
supply constraints for the company are getting addressed gradually (we
had pointed at Nestle upping the ante in terms of new products in our
sector report ‘India Food Guide’ dated 17th Feb 2012). Cadbury (Kraft) is
also trying to capture a slice of this pie by promoting chocolates as a
substitute for sweets. Nestle remains the best play on Indian Food
segment, but maintain ‘HOLD’ as the stock is fairly valued over near term.
Milkmaid comes out of relative inactivity, savors sweet market
Nestle Milkmaid has launched Milkmaid Creations, a new range of powdered dessert
mixes. The range includes five variants‐eggless cake, ‘pista kulfi’, ‘besan laddoo’,
‘badaam kheer’ and ‘rice kheer’. The price bracket is INR95‐INR145. The desert mix
range is currently available at select outlets in 54 cities across the country.
Changing demographics to bolster growth for ready to cook
With the changing socio‐economic pattern and increasing number of working couples,
the concept of convenience food is fast becoming popular in India for saving time and
effort. The ready to cook segment is growing at ~25% CAGR.
Outlook and valuations: Fairly valued; maintain ‘HOLD’
We are optimistic about this launch as Nestle understands Indian consumers (R&D unit
coming up) and their taste preferences well. The stock is trading at 36.4x and 30.2x
CY12E and CY13E EPS, respectively. We maintain ‘HOLD’ with ‘Sector performer’ rating
on relative return basis.
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