Nomura raised the price target on Nestle India to Rs 1,675 from Rs 1,500 while it maintained a ‘Buy’ rating. This rise in price target came a day after the FMCG conglomerate reported a set of robust Q1FY27 earnings.
“We value Nestle India at an unchanged P/E of 65x, in line with its eight-year trading average of Q1FY29 EPS (Q4FY28 previously). We forecast an FY26-FY29 EPS growth of 18.5% annually over it,” said Nomura. “We raise FY27 and FY28 EPS by 8.5% and 7% to factor in the beat.”
Blowout Q1FY27 financial results
Nestle India delivered its “third blowout quarter in a row,” with performance exceeding estimates across all financial lines. Standalone revenue grew 25.2% year-over-year (surpassing the 19% consensus estimate), driven by a significant 20% YoY increase in volume and mix.
Four strategic corporate priorities
Under the leadership of MD Manish Tiwary, the company is focused on four key pillars: customer centricity through micro-marketing, penetration-led volume growth (targeting 10-15% annual distribution expansion), brand reinvestment in core products like Maggi and KitKat, and accelerating tech-enabled sales.
Global leadership for core brands
India has now become the largest market globally for both Maggi and KitKat. The company achieved double-digit growth across all categories, with export revenues specifically seeing a 35.6% YoY increase despite geopolitical challenges.
Rapid digital and channel scaling
The company is successfully scaling its E-commerce and Quick Commerce channels, which contributed 12.5% of total sales in Q1FY27. Simultaneously, Nestle India expanded its rural footprint to almost 216,000 villages to drive further penetration.
Positive outlook
While acknowledging potential inflationary pressures from cocoa and sugar, the brokerage house forecast a strong 18.5% EPS compound annual growth rate (CAGR) for the FY26-29 period.
“While we expect Nestle India to continue to deliver strong results vs peers, its rich valuations and likely moderation in growth from Q2 and Q3FY27 as it starts to lap a higher base may limit share price performance,” said Nomura.
Nestle India share price performance
The share price of Nestle India has risen more than 2% in the last five trading sessions. The stock has given a return of 4.4% in the past one month and 12.4% in the last six months. Nestle India’s share price has given a return of 18.5% over the last 1 year.
