Hold Nestlé India: target of Rs 19300: ICICI Direct

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26 Aug, 2025 12:21

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ICICI Direct's research report on Nestlé India

Nestlé India (NIL) reported a healthy set of numbers with 8.6% revenue growth contributed by 10.2% domestic sales growth. Some brands like Maggi Noodles, KitKat, Nescafe Classic, Milkmaid, Maggi Sauces & Masala-Ae-Magic witnessed strong double digit growth. Post pandemic, e-commerce channel has been growing strongly for the industry and remained prominent growth channel with 66% growth in Q1 for the company. It is contributing 3.8% to sales. Gross margins expanded 223 bps mainly due to lower milk prices. It is important to note that milk procurement prices in base quarter saw exorbitant increase. Employee spend was lower by 58 bps (as percentage to sales) whereas overhead spends were up 131 bps (as percentage to sales). Operating profit increased 17.3% to Rs 930.6 crore. Operating margins increased 191 bps to 25.8%. PAT increased 14.6% to Rs 602.2 crore. The company declared an interim dividend of Rs 25/share.

Outlook

We maintain our HOLD recommendation with a revised target price of Rs 19300/share (earlier TP: Rs 18000). 

For all recommendations report, click here

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