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Informist, Wednesday, Jul. 22, 2026

--Equirus Sec retains 'Add' for Nestle India, ups target price 9%

--Equirus Securities raises target price of Nestle India 9% to INR 1,595 

--Equirus: Nestle India stock valuation limits further upside 

MUMBAI – The earnings visibility for the fast-moving consumer goods major Nestle India Ltd. has improved after the company detailed its June quarter results but the current valuation of the stock limits further upside, according to Equirus Securities. The brokerage maintained an 'add' call and raised the target price by 9% to INR 1,595. Equirus Securities said that the recommendation reflects stronger volumes, market share, and structural margin improvement. 

For the June quarter, the Kit-Kat maker reported a standalone net profit of INR 9.75 billion, up nearly 48% on year. This was higher than the Street's expectation of INR 8.17 billion. The revenue of the company gained over 25% on year to INR 63.78 billion and was above the analysts' estimate of INR 60.31 billion. Of this, the domestic sales rose nearly 25% on year to INR 60.73 billion and the exports were up nearly 36% at INR 2.90 billion.

"Growth was volume-led across categories, channels and geographies," Equirus Securities said. Nestle India's two-year revenue compound annual growth rate of around 15% indicate that the growth was not merely base-driven. "Brand investments, innovation and wider rural, e-commerce and out-of-home reach drove penetration and transactions," the brokerage said. Nestle India posted robust growth in its segments.

Savings and operating leverage contributed over 40% on-year growth in advertisement and promotion, while the earnings before interest, tax, depreciation, and amortisation margin expanded by 253 basis points. "This suggests profitability did not come at the expense of brand investment, supporting more sustainable growth," Equirus Securities. For the June quarter, the company reported an EBITDA margin of 24.2%.  

The brokerage is of the view that Nestle India's performance for the reporting quarter reinforces its operating model with volume-led growth, higher brand investments, and broader category participation. Equirus Securities expects rural penetration, premiumisation, and stronger quality control to aid the company's growth. "We expect these initiatives and structural efficiencies to support healthy earnings compounding..." the brokerage added. However, Equirus Securities maintained its recommendation at 'add' as the stock valuation has already priced in these measures for growth going ahead. 

On Wednesday, shares of the company ended nearly 3% higher at INR 1,493.60.  End

Reported by Adhithya Aji 

Edited by Akul Nishant Akhoury

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