Stay 'Neutral' On Nestle Maintains Motilal Oswal On Expensive Valuations — Check Target Price

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Motilal Oswal Report

Mr. Manish Tiwary has taken on the role of Chairman and Managing Director of Nestle India Ltd., effective from Aug 01, 2025. His outlook on the way forward will be the key things to watch out for. Under the new leadership, the company remains committed to driving penetration and volume growth, with continued investments in brands.

Nestle aspires to deliver double-digit revenue growth in the medium term. With its RURBAN strategy, Nestle has delivered strong growth in RURBAN markets, with most categories benefiting from improved distribution penetration. The adoption of packaged foods has increased in tier-2 and rural markets.

Nestle continues to enhance its portfolio through ongoing innovation and premiumization initiatives.

About 85% of the company’s portfolio has benefitted from the GST rate cuts. Moreover, its product portfolio remains relatively safe from local competition, requiring limited overhead costs to protect market share.

In the last two years, Nestle has invested ~Rs 39 billion in strengthening its manufacturing capabilities to cater to anticipated future demand.

We model revenue/Ebitda/PAT CAGR of 10%/11%/12% over FY25-28E. We are constructive on the business and hopeful for potential improvement in growth metrics. The stock is trading at 68x/58x FY26E/FY27E EPS. Given its expensive valuation, we reiterate our Neutral rating with a target price of Rs 1,300 (based on 60x Sep'27E EPS).

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