Nestle Q3 Review — Results Below Expectations Led By Sales Miss; Nirmal Bang Maintains 'Buy' On The Stock

Nestle’s return on capital employed is also the best-of-breed. Nevertheless, with weak top-line momentum compared to the past likely to persist for some time and expensive valuations of ~62 times FY26E EPS and 56x FY27E EPS make us maintain Hold rating on the stock..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Nirmal Bang Report.Nestle India Ltd. reported lower than expected numbers led by sales growth coming in at 3.9% YoY compared to expectations of 7.5% growth. Gross and Ebitda margins were in line with expectations and hence operating performance miss versus expectations by around 4% was led entirely by sales miss. Given that a major domestic acquisition is unlikely, it is important that there is a step-up in innovation. In July 2024, we had highlighted about the portfolio that Nestle has in other Emerging Markets in a detailed note, some of which could potentially come to India eventually.We remain constructive about the Packaged Foods growth opportunity in India and Nestle (along with Britannia Industries) has been at the forefront in driving growth for the past decade. Nestle’s return on capital employed is also the best-of-breed. Nevertheless, with weak top-line momentum compared to the past likely to persist for some time and expensive valuations of ~62 times FY26E EPS and 56x FY27E EPS make us maintain Hold rating on the stock..Click on the attachment to read the full report:.Vedanta Gets 'Neutral' Rating From Motilal Oswal After Q3 Results — Here's Why.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Nestle Q3 Review — Results Below Expectations Led By Sales Miss; Nirmal Bang Maintains 'Buy' On The Stock

Despite the stock underperforming peers over the last year, valuation is not cheap at ~62 times FY26E EPS and ~56x FY27 EPS, adds the brokerage.

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