Neutral Nestle India; target of Rs 2400: Motilal Oswal

Neutral

Motilal Oswal's research report on Nestle India

Nestle sees strong growth potential in India, as its per capita packaged food consumption remains low. With 60 million people expected to join the middle- and high-income segments by 2030, rising affordability will boost demand. Nestle’s growth strategy focuses on efficiency, brand investment, and market share expansion to drive profitability. The company focuses on premiumization, which is outpacing the overall growth. Innovation contributed 6.5% of sales in 9MFY25, which Nestle aims to increase to 10% in the medium term. The company has a strong distribution network of 5.3 million outlets (1.7 million direct reach). It achieved 33% growth in e-commerce (8.5% of total sales).

Outlook

We estimate a CAGR of 9%/11%/12% in net sales/EBITDA/APAT during FY25-27. The stock trades at 63x FY26E/56x FY27E EPS, and given its expensive valuation, we maintain a Neutral rating with a TP of INR2,400 (based on 60x P/E Dec’26E).

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Nestle India_05022025_Motilal Oswal