Nestle shares are in focus after the company reported a strong set of Q4 results yesterday. Brokerages have largely maintained their stance, but all have hiked their target prices to reflect the bullish sentiment.
The FMCG giant's net profit for the fourth quarter of FY26 beat estimates, rising to Rs 1,114 crore versus an estimate of Rs 926 crore, according to an exchange filing. This is despite a one-time loss of Rs 36.2 crore. Nestle posted a 22.6% rise to Rs 6,748 crore in standalone revenue, versus an estimate of Rs 6,186 crore, and an EBITDA of Rs 1,772 crore as compared to an estimate of Rs 1,498 crore.
Brokerages have, however, also cited valuation constraints despite improved fundamentals. Domestic revenues rose 23% year-on-year, driven by double-digit volume growth, GST rate-cut benefits, grammage increases and widening rural and quick-commerce distribution. Gross margins are expected to remain stable as key input costs stay range-bound, while operating margins surprised positively on cost efficiencies.
Management commentary reinforced confidence in sustaining momentum, with brokers highlighting a continued focus on penetration-led volume growth, reinvestment behind core brands, customer-centric execution and technology-enabled sales and operations. Legacy brands such as Maggi continue to dominate their categories, while KitKat and Nescafe are gaining market share.
Citi stands out as the most bullish, reiterating a Buy rating and the highest target price, arguing that brand strength and execution justify Nestlé's premium valuations despite a sharp recent rally. Kotak Securities remains the most cautious, maintaining a Reduce rating on rich multiples that already price in strong earnings growth.
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Morgan Stanley on Nestlé India
- Morgan Stanley maintains an Equal-weight rating and hikes the target price to Rs 1,461 from Rs 1,370.
- Q4 delivered a strong beat on both topline and margins.
- Domestic revenues grew 23% YoY, marking the third consecutive quarter of double-digit growth.
- Earnings delivery was strong with a positive topline surprise.
- Management commentary remains focused on driving growth.
- Key priorities include penetration-led volume growth, brand reinvestment, customer centricity and tech-led execution.
- Maggi continues to lead, while KitKat and Nescafé have gained market share over the past five years.
Goldman Sachs on Nestlé India
- Goldman Sachs maintains a Neutral rating and hikes the target price to Rs 1,425 from Rs 1,275.
- Revenue grew 23%, driven by double-digit volume growth.
- GST rate cuts and quick commerce expansion are key growth drivers and expected to sustain in H1FY27.
- Gross margins are expected to remain stable as input costs stay range-bound.
Investec on Nestlé India
- Investec upgrades the stock to Hold from Sell and hikes the target price to Rs 1,426 from Rs 1,341.
- Volume-led growth remains robust.
- Operating margins are strong, supported by cost efficiencies.
- The brokerage awaits more compelling valuations and sustained growth before considering further upgrades.
Jefferies on Nestlé India
- Jefferies maintains a Hold rating and hikes the target price to Rs 1,325 from Rs 1,300.
- Q4 performance was strong, led by double-digit volume growth.
- Advertising spends rose sharply by 50%, signalling a growth-focused strategy.
- EBITDA margins expanded to multi-quarter highs despite some gross margin pressure.
- Growth was broad-based across categories and channels.
- Management remains focused on penetration-led growth, brand investments and capacity expansion.
- Valuations remain a concern.
Macquarie on Nestlé India
- Macquarie maintains a Neutral rating and hikes the target price to Rs 1,400 from Rs 1,260.
- Sales growth is expected to remain healthy.
- Growth is being driven by GST-linked grammage increases and rural distribution expansion.
- The brokerage maintains a Neutral stance due to limited upside at current valuations (~63x FY27E EPS).
Kotak Securities on Nestlé India
- Kotak maintains a Reduce rating and hikes the target price to Rs 1,265 from Rs 1,200.
- Strong volume-led growth supported by internal execution and external tailwinds.
- Margins expanded despite higher advertising and promotion spends.
- Valuations remain expensive at 69x/58x FY27/28E PE, already factoring in ~18% EPS CAGR.
Citi on Nestlé India
- Citi maintains a Buy rating and hikes the target price to Rs 1,675 from Rs 1,600.
- Q4 delivered an all-round beat.
- Growth momentum is expected to sustain in the near to medium term.
- Brand strength and execution remain key drivers.
- Despite a 20% stock rally, Citi believes earnings growth will support premium valuations.
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