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The article outlines the stock performance and stance of the brokerage on this company, which is a major fast-moving consumer goods (FMCG) company and a subsidiary of the Swiss multinational Nestlé S.A.
With a market capitalization of Rs. 2,39,622 crore, Nestle India Ltd’s share is trading at Rs 1,243 per share, down by 0.91 percent from its previous close. The stock of the company gave a negative return of 4 percent over the last year and 30.12 percent over the past 5 years, while it trades near the levels of Rs 1,243 that is same as the December 2023 levels
Brokerage View
PL Capital on Nestle
PL Capital maintains an Accumulate rating on Nestle India with a target price of Rs 1,526, implying an upside of 23 percent, supported by strong revenue growth, improving margins and broad-based segment performance.
Strong Revenue Growth: Nestle India’s revenue increased 20.3 percent YoY to Rs 6,788 crore in Q2 FY27, supported by strong domestic and export sales. The brokerage noted that sustained volume growth across key categories helped the company deliver a strong quarterly performance despite inflation concerns.
Higher EBITDA and Margins: EBITDA rose 30.5 percent YoY to Rs 1,616 crore in Q2 FY27, while EBITDA margin expanded to 23.8 percent from 21.9 percent in Q2 FY26. Operating leverage, along with lower employee and raw material costs, supported profitability during the quarter.
Growth Across Key Segments: Nestle India recorded broad-based growth across beverages, prepared dishes and cooking aids, confectionery, and milk products in Q2 FY27. Performance was supported by premiumisation, product innovation, wider rural reach and e-commerce demand, while coffee and KitKat continued to see strong traction.
Higher EPS Estimates and Target Price: PL Capital raised its FY28 EPS estimate by 1.2 percent to Rs 24.9 and FY29 EPS estimate by 1.1 percent to Rs 27.9. The brokerage also increased its target price to Rs 1,526 from Rs 1,514, maintaining its Accumulate rating.
HSBC on Nestle India
HSBC maintained its Hold rating on Nestle India with a target price of Rs 1,480, implying an upside of 19 percent. The brokerage acknowledged strong quarterly performance but expects growth to moderate in the second half of FY27 as favourable base effects fade.
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Revenue Growth in Line with Estimates: Nestle India reported 20 percent YoY revenue growth in Q2 FY27, with a two-year CAGR of 15 percent. The performance was in line with HSBC’s estimates and market consensus, while EBITDA came in around 3 percent above consensus expectations, indicating better-than-expected operating performance.
Improving Nutrition Performance and Strong Chocolates and Coffee Businesses: HSBC noted that the nutrition business recorded sequentially improving performance, while the chocolates and coffee businesses sustained strong growth. However, the brokerage expects growth to moderate in the second half of FY27 as the impact of a favourable base diminishes, keeping its outlook cautious despite the strong quarterly results.
Jefferies on Nestle India
Jefferies maintained its Hold rating on Nestle India with a target price of Rs 1,350, implying an upside of 9 percent, citing strong quarterly growth and margins ahead of estimates. However, the brokerage expects growth to moderate in the second half of FY27 as the base normalises, with food inflation and margin uncertainty remaining key concerns.
Strong Quarterly Performance: Nestle India reported 20 percent YoY revenue growth and 30 percent EBITDA growth in Q2 FY27. Margins also came in ahead of estimates despite inflation concerns, reflecting strong operating performance during the quarter.
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Broad-Based Growth and Advertising Spending: Growth remained broad-based across the company’s businesses, supported by continued high advertising and promotion spending. Jefferies noted that these investments reflect the company’s focus on sustaining growth and strengthening demand across product categories.
Food Inflation Remains a Concern: Management highlighted concerns about rising food inflation but plans to take measures to manage its impact. Jefferies expects growth to moderate in the second half of FY27 as the low base normalises and GST benefits enter the comparison base, while margins remain uncertain.
