Nestle India Q3 results get mixed brokerage reviews; should you buy or sell the stock? Check target prices

Nestle India

• Nestle India posted strong Q3 FY26 volume-led growth across categories.
• Brokerages are split due to margin pressure from high brand investments.
• Nomura is bullish; CLSA and Jefferies maintain Hold due to valuation concerns.

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Brokerages were divided on the outlook for Nestle India Ltd after the FMCG major delivered a strong, volume-led performance in Q3 FY26. While analysts pointed to a sustained recovery in demand and stepped-up brand investments, concerns around near-term margin pressure and rich valuations tempered optimism on the stock.

Most brokerages said Nestle India’s fiscal third-quarter performance marked one of its strongest volume upcycles in recent years, supported by broad-based growth across categories and channels. However, the sharp increase in advertising and promotion (A&P) spending -- though strategically positive -- has weighed on operating margins, limiting near-term upside expectations.

Nestle India reported a strong set of Q3 FY26 results, posting an 18.5 percent year-on-year rise in revenue to a record Rs 5,667 crore and a 46 percent jump in net profit to Rs 1,018 crore, aided by a one-time tax write-back. EBITDA grew 9 percent on-year, though margins narrowed sharply due to a 42 percent surge in advertising and promotion spends. Following the results, Nestle India shares rose 3.5 percent on Friday. The stock has returned over 15 percent in one year, outperforming Nifty 50.

Nestle India stock call: Brokerages offer mixed views

Analysts broadly agreed that Nestle India's Q3 FY26 performance signals improving consumption trends and better demand elasticity. At the same time, they cautioned that the current phase of aggressive brand investment, while supportive of medium-term growth, could delay operating leverage.

Nomura was bullish on Nestle India stock, reiterating a Buy rating with a target price of Rs 1,450 per share, implying nearly 9 percent upside from current levels. The brokerage said Nestle India delivered another clear earnings beat, driven by strong volume and mix growth of around 16 percent year-on-year. While operating margins declined due to a 42 percent on-year surge in A&P spends, Nomura noted that stable raw material costs are aiding sequential margin recovery. It also flagged valuation as a constraint, with the stock trading at around 60 times FY28 earnings.

In contrast, CLSA maintained a Hold rating with a target price of Rs 1,311. The brokerage highlighted that Q3 sales growth materially exceeded expectations and was largely volume-driven, particularly in the domestic business. It said EBITDA also beat estimates despite pressure from elevated brand investments and raised Nestle India’s FY26-28 earnings estimates by 3-5 percent.

Jefferies also stayed at Hold, with a target price of Rs 1,300. The brokerage pointed to Nestle India’s strongest volume-led topline growth in nearly three years, with three of four segments delivering strong value growth. While higher brand investments weighed on margins in the short term, Jefferies said elevated A&P spending should support medium-term growth and category expansion.

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