Nestlé India Ltd. posted a mixed March-quarter performance that beat analyst margin forecasts but fell short on revenue and profit expectations. Brokerages remain divided on the stock, with several firms flagging steep valuations as a key concern, despite signs of gradual improvement in volume growth and margin resilience.
India’s third-largest fast-moving consumer goods company reported a 4% year-on-year revenue growth for the fourth quarter, in line with consensus estimates. Ebitda margins surprised positively, aided by lower operating expenses, but the earnings per share print missed street expectations in some cases due to a higher tax outgo.
Brokerages are broadly aligned on key themes—margin tailwinds from stabilising input costs, like cocoa and edible oil, continued inflation in coffee and dairy prices, and a cautious stance on premium valuations amid soft volume growth trends.
Jefferies | Target Price: Rs 2,350 | Rating: Hold
Jefferies flagged a slight miss on both revenue and Ebitda, despite better margins driven by lower costs. The firm cut its earnings per share estimates by 3%, citing weak volume growth and a lack of major positive catalysts. Beverages and confectionery showed double-digit growth, led mainly by price hikes, while the nutrition segment continued to drag, it said.
Macquarie | Target Price: Rs 2,375 | Rating: Neutral
The quarter was a margin beat, with Ebitda 6% above estimates. Macquarie attributed the beat to lower marketing spends and does not see it sustaining.
While double-digit growth in beverages and confectionery was a highlight, weakness in milk products and continued pressure on volume momentum remain key concerns. Valuations at around 65 times financial year 2027 earnings are seen as stretched.
JPMorgan | Target Price: Rs 2,450 | Rating: Overweight
The brokerage called the results better-than-expected on margins, with steady revenue and improved distribution strategy. Growth in e-commerce and quick commerce channels remains encouraging. The brokerage expects improving margins aided by easing prices in cocoa and edible oil, even as dairy and coffee inflation persist.
Nuvama | Target Price: Rs 2,825 | Rating: Buy
Nuvama maintained a positive stance, noting in-line revenue and Ebitda growth for the quarter. The brokerage cut its earnings per share estimates by up to 5% due to sustained cost inflation and high depreciation linked to capital expenditure. Recovery in urban demand is expected by the second half of financial year 2026. Maggi returned to volume growth, and the pet care business recorded its highest-ever growth since integration.
Emkay | Target Price: Rs 2,300 | Rating: Reduce
Emkay retained a bearish stance on Nestle, citing continued demand stress across large parts of the portfolio. While margin delivery in the March quarter was aided by cost control, the brokerage remains cautious given weak volumes in milk products and competitive pressure in the prepared foods category. Raw material inflation continues to be passed on via price hikes, which could further strain demand.
Investec | Target Price: Rs 2,386 | Rating: Sell
Investec downgraded the stock to ‘sell’, raising its target price slightly. The firm warned that valuations—at 61 times financial year 2027 estimated earnings—do not reflect the company’s growth trajectory.
While macro recovery and new product launches may help, exit growth rates for the quarter were soft, and revenue-led earnings downgrade risks persist. Coffee and cocoa inflation were highlighted as key headwinds by the brokerage.
Nirmal Bang | Target Price: Rs 2,415 | Rating: Hold
Nirmal Bang called the quarter better-than-expected and sees a gradual resumption of double-digit revenue growth from financial year 2026. It remains constructive on the long-term packaged food opportunity in India but said expensive valuations—at about 68 times estimated earnings for financial year 2026—justify a cautious stance for now.
Nestle India shares were trading 1.27% lower at Rs 2,402.2 apiece, compared to a 1.43% decline in the benchmark Nifty 50 as of 11:28 a.m. At the same time, the Nifty FMCG, a gauge of the top 15 companies in the space, was trading 1.48% lower.
Catch The Broader Trends Here
RECOMMENDED FOR YOU
Stock Recommendations Today: Financials, Defence, Mutual Fund Data, AMCs, Life Insurers On Brokerages' Radar
Jun 11, 2025
Stock Recommendations Today: HPCL, Reliance, Ashok Leyland, Property Stocks On Brokerages' Radar
Jun 06, 2025
ITC Q4 Results Preview: Cigarette Volume Growth Likely, Margin Pressures To Weigh On Profitability
May 21, 2025
Stock Recommendations Today: HAL, Eris Lifesciences, Hyundai Motor, Divi's Labs On Brokerages' Radar
May 19, 2025
POPULAR