Nestle India Ltd. share price target

With a 12% upside potential from the CMP, we maintain our BUY rating on the stock.

Positively, low cocoa content in Nestle products (~5% vs ~20% in peers) provides market share gain opportunity in the chocolate category (Nestle has higher revenue salience in wafer segment).

Strong growth witnessed across geographies driven by sustained growth in domestic markets and healthy double-digit growth in exports

Our REDUCE call on Nestlé is a factor of valuations (62x P/E for FY26) pricingin the positive outlook. Capacity augmentation (Rs64bn capex spends over
CY20-25), a wider parent portfolio (gaining relevance in the Indian context),
and thrust on rural, all bolster the fundamentals

Nestle India (NEST) reported 9% YoY revenue growth (est. 8.5%) during the
quarter ended Mar’24. The company has achieved 12% revenue CAGR over a
five-year period (CY18-FY24). Domestic sales grew 9% YoY, well supported by
pricing, mix, and volume growth. Export sales rose 19% YoY to INR2.3b for the
quarter

Recommendation: With a 12% upside potential from the CMP, we maintain our BUY rating on the stock.

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