CMP: ₹2,551.15
Nestle India is among the many prime beneficiaries of heightened client adoption of packaged meals. Present capex cycle of ₹6,400 crore for CY20-25 is prone to assist the corporate in addressing section demand extra successfully.
Nestle’s thrust on penetration-led quantity development helps it outperform sector quantity development. Sturdy pricing energy is an added benefit and a probable issue of the quicker margin recoup. Initiatives like ‘Nestle Well being Science’ and the pet meals foray are prone to maintain the corporate on the forefront. FY26 P/E of 64x largely factors-in its robust enterprise fundamentals and superior execution.
Nestle India has maintained its regular valuation march on the again of improved execution submit the Maggi disaster. Sturdy positioning in area of interest meals & drinks has aided Nestle in logging higher margins, wholesome returns, and low working capital. Incremental thrust can be to increase the addressable market, the place M&A might be tapped.
We provoke protection on Nestle India with a REDUCE advice and Mar-25 TP of ₹2,650, primarily based on 65x Mar-26 earnings. Any consumption slowdown within the formal sector can be a draw back threat, whereas Nestle India’s functionality of utilising enhanced capability forward and driving innovation (aligning with Indian preferences) can be an upside threat.
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