Nestle India Ltd. share price target

Domestic sales continue to underpin growth, rising 8.9% YoY in the December quarter on better pricing, volumes and product mix

Incremental insights from Nestle's analyst meet were – (1) sales-driven initiatives have contributed ~3-4% of ~7% volume CAGR over last 5 years (see our report); however, incrementally, line selling will be the key driver (though at a slower pace), (2) penetration-led volume growth (through continued thrust on rurban strategy), (3) dialling up of innovation (multiple niche launches; 10 new projects in the pipeline) to drive its contribution to 10% (from 6% currently) in the medium term.

Innovation and market penetration-led volume growth remain strategic focus areas; growing emphasis on rural markets

Nestle’s revenue growth of 10% YoY is healthy and ~21-22% YoY growth in EBITDA/PAT is even stronger, driven by price retention benefits given stability in the raw material price (especially milk - report). Revenue growth was strong across key segments driven by (1) deeper penetration in RURBAN (lower-tier towns and villages (report), (2) a portfolio which is better insulated to market slowdown.