Motilal Oswal's research report on Nestle India
Nestle India (Nestle) reported a 4.5% YoY growth in total revenue in 4QFY25, in line with our estimate. Domestic sales grew only 4.2% YoY (vs. 9% growth in the previous eight quarters) given the macroeconomic headwinds. We believe volume growth was in the low single digit. Beverages and confectionery posted double-digit growth. Export revenue declined 9% YoY, hit by green coffee exports. GM contracted 60bp YoY/20bp QoQ to 56.2% (est. 55.8%). Management indicated that coffee and cocoa prices continued to be inflationary, while edible oil prices remained stable. EBITDA margin inched up 10bp YoY to 25.6% (est. 23.5%) driven by sharp cost-control measures. We model an EBITDA margin of 24.5% for FY26 and 25% for FY27.
Outlook
The stock is trading at 66x/60x FY26/FY27 EPS. Given the stock’s expensive valuation, we reiterate our Neutral rating with a TP of INR2,400 (based on 60x P/E Mar'27E).
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