Nestle India Limited - NESTLEIND recently attended Nestle India’s analyst meet. The company is in a transitional phase of achieving its lost sales by launching new products and rejuvenating its existing portfolio. While it has managed to execute very well in a highly challenging environment marked by sluggish market conditions, most of the easy gains have already come through. Its growth path from here is rather challenging, but the consensus estimates paint an overly optimistic scenario. We continue to believe that chances of earnings downgrades remain high and maintain our Sell recommendation.

Valuation: Phillip Capital raise their target multiple to 40x our CY17 earnings, translating into a target price of Rs 5,900 (Rs 5450 earlier). Considering the significant downside, maintain Sell recommendation.