Nestle India Ltd. share price target

Nestle’s revenue growth of 21% YoY (highest ever in last decade on LFL basis) was above our (and consensus) estimates driven by price hikes. Maintaining volume growth trajectory coupled with mix improvement despite price hikes is impressive (no surprises though).

We recommend a BUY rating on the stock with a near-term TP of Rs 21,700, implying an upside of 10% from the CMP

Highest domestic revenue growth in a decade, at 14.8% in CY22, led by both volumes and pricing

Nestle India (NEST) continues to report mid to high teens (14-18%) revenue growth driven by broad based performance across all segments. Impact of price hike on LUPs (15-20% salience) is moderately concerning. However, early-signs of clawing back volume market share in the main-stream and premium segments is comforting.

We estimate Revenue/EBITDA/PAT CAGR of 11%/14%/15% over CY22-25E based on the above thesis and we maintain our BUY rating on the stock with the unchanged TP of Rs 22,000/share. We value the company at 65x CY24 EPS. The TP implies an upside of 12% from the CMP.