Buy Nestle India; target of Rs 23,550: Sharekhan

Sharekhan is bullish on Nestle India has recommended buy rating on the stock with a target price of Rs 23,550 in its research report dated October 19, 2022.

Broker Research

October 20, 2022 / 22:15 IST

26 Aug, 2025 12:21

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Sharekhan's research report on Nestle India

Nestle India (Nestle) clocked strong y-o-y revenue growth of 18.2% in Q3CY2022 led by a mix of consistent volume growth and price hikes, while raw material price inflation resulted in a 242-bps y-o-y decline in OPM to 22%; PAT grew by 8.3% y-o-y to Rs. 668.3 crore. Domestic volume growth is sustained at high-single digits for the past few quarters. We expect volume growth momentum to sustain in quarters ahead driven by sustained innovation, better penetration of key brands in the rural market and foray into new categories. Dairy, grain and coffee prices firmed up and will put pressure on near-term margins. A better mix and efficiencies would help to post better margins in the medium term.

Outlook

Stock has underperformed the broader indices and is trading at 61.8x and 52.1x its CY2023E and CY2024E earnings. We maintain a Buy recommendation on the stock with a revised PT of Rs. 23,550.

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