Synopsis:
Nestle India Ltd is in focus after the announcement of its first-ever bonus issue in the ratio 1:1.
One of the top FMCG companies has made history by announcing its first-ever bonus issue, in the ratio of 1:1, putting it in the public spotlight. The bonus’s record date is scheduled for the following week.
What is a Bonus?
A bonus issue is a business practice in which a business gives its current shareholders free extra shares in accordance with a predetermined ratio as a way of rewarding them. In this instance, the company has decided to issue bonus shares, instead of paying out dividends on the profits.
What’s the News?
On Friday, Nestlé India’s stock closed at ₹2,275, up 1.2% from its previous close of ₹ 2,247.70 per share, with a market capitalization of ₹2,19,317 crore. Nestle India Ltd has announced its first ever bonus issue in the ratio of 1:1, with the record date set for August 8, 2025.
In other words, shareholders who already owned one share on the record date will get one more share for free, doubling their ownership at no extra expense. This move comes a year after the company had undertaken a stock split, making the current bonus issue another shareholder-friendly step in its corporate history.
About the Company
Nestlé India, a subsidiary of Swiss multinational Nestlé S.A., operates in the food segment and is part of the world’s largest food and beverage company. Nestlé employs about 277,000 people worldwide, operates in more than 185 countries, and owns more than 2,000 brands, including both local and international favorites. The company’s goal is to serve delicious food that satisfies the senses, nourishes the body, and promotes healthy living at all stages of life.
Nestlé is always coming up with new food, drink, and nutritional health solutions. The company’s well-known brands in India include Maggi, KitKat, NESCAFÉ, MUNCH, Milkmaid, Everyday, Cerelac, and Nan, all of which have become household names across the country.
The company’s revenue for Q1FY26 has increased by 5.86 percent year over year from Rs. 4,814 crore to Rs. 5,096 crore and decreased by 7.41 percent QoQ from Rs. 5,504 crore. Whereas the net profit saw a decline of 11.78 percent, from Rs. 747 crore to Rs. 659 crore year over year and a sharp decrease of 25.54 percent from Rs. 885 crore in Q4FY25.
At the movement company is trading at a price-to-earnings (P/E) ratio of 73x which is higher than industry average of 63.3x. A return on equity (ROE) of about 83 percent and a return on capital employed (ROCE) of about 95.7 percent demonstrate the company’s strong position. Its debt-to-equity ratio stands at 0.28, showing low leverage in the company.
Written By Akshay Sanghavi
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
