Accumulate Nestle India; target of Rs 2524: KR Choksey

KR Choksey recommended accumulate rating on Nestle India with a target price of Rs 2524 in its research report dated October 18, 2024.

Broker Research

October 21, 2024 / 10:14 IST

Accumulate

26 Aug, 2025 12:21

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KR Choksey's research report on Nestle India

Nestlé's Q2FY25 performance fell below our expectations, primarily due to low consumer demand, the impact of a high base from H1FY24, and commodity headwinds. Increased competition has led to higher advertising and promotion (A&P) expenses, which in turn compressed EBITDA margins. Material costs came in above expectations, and management has indicated that these costs are likely to remain elevated in the near future. Other income was significantly lower than our projections. We lower our FY25E/FY26E EPS by 10.3% and 7.2%, respectively, mainly due to weak revenue performance in the quarter and headwinds in commodity prices, which impacted margin.

Outlook

We assign a P/E multiple of 65.1x (maintained) on FY26E EPS of INR 38.8 (previously: 41.8) to arrive at a target price of INR 2,524/share (previously: INR 2,721). Given the 6.1% upside potential, we maintain our ‘ACCUMULATE' rating on the shares of Nestle India.

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