Hold Nestle; target of Rs 2350: ICICI Securities

ICICI Securities recommended hold rating on Nestle with a target price of Rs 2350 in its research report dated April 24, 2025.

Broker Research

April 25, 2025 / 22:05 IST

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ICICI Securities research report on Nestle

Nestle’s Q4FY25 operational performance was subdued with revenue growth of 4% YoY on a high base of 9% and ~100 bps margin contraction primarily due to inflationary pressures in key raw materials such as coffee, edible oil and palm oil. During the quarter, the performance was led by double-digit growth in the Beverages and Confectionery categories, largely driven by pricing actions. This was partially offset by muted performance in the Prepared Dishes and Milk Nutrition segments, impacted by high competition and weak consumer demand, respectively. Nestle announced the appointment of Manish Tiwary as MD for a fiveyear term starting April 1, 2025. Under Suresh Narayanan tenure (2015-2025), Nestle achieved significant outperformance compared to peers through consistent product innovation and distribution expansion in the rural markets.

Outlook

We marginally tweaked our estimates, modelling revenue / EBITDA / PAT CAGR of 11% / 14% / 17% over FY25-26E. Maintain HOLD with a DCF-based revised target price of INR 2,350 (vs INR 2,300). Upside risk: Faster-than-anticipated recovery in demand environment.

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