Nestle India analysts do not see significant share price upside after Q3 results citing high valuations

Shares of Nestle India Ltd. are in focus on Sunday, February 1, as brokerages have mixed views on the stock after it reported its third quarter earnings on Friday.

Brokerages Jefferies and CLSA have "hold" ratings on Nestle India, with target prices near its previous close, while Nomura has a "buy" rating and has projected an upside of nearly 9% from its previous close.

Jefferies

Jefferies has a "hold" rating on Nestle India with a target price of ₹1,300 per share, which is near its previous closing price of ₹1,332.5 apiece.

The analyst said Nestle India reported its strongest top-line growth in the last three years at 19% from the previous year, which was volume-led and among the best in class. Three of the four segments reported strong double-digit (D/D) value growth, it said.

However, Gross Margins continued to contract due to input cost pressures, it said.

The company witnessed a sharp 180 bps contraction in its earnings before interest, tax, depreciation and amortisation (EBITDA) margin, but it is heartening to see this driven by higher brand investments, which should help in the medium-term, Jefferies said.

CLSA

CLSA has a "hold" rating with a price target of ₹1,311 apiece on Nestle India, which again is near its previous close of ₹1,332.5 apiece.

It said the company's third quarter sales growth of 18.5% were 8% above estimates and its domestic sales grew 18.3% from the previous year, which were largely volume-led.

The analyst has raised its FY26-28 earnings estimates by 3% - 5% to reflect higher-than-expected sales and profit growth.

Nomura

The brokerage has a "buy" rating on Nestle India with a price target of ₹1,450 per share, a potential upside of 8.8% from its previous close of ₹1,332.5 apiece.

It said the company's third quarter was a big beat again as volume mix-up was 16% from the previous year, and sales were up 18.6%. Both were above estimates by 8% and 10%, respectively, it said.

The stock trades at 60 times its financial year 2028 earnings per share, it added.

Of the 40 analysts that have coverage on the stock, 12 have a "buy" rating, 17 have a "hold" rating and 11 have a "sell" rating.

Shares of Nestle India ended the previous trade session 3.5% up at ₹1,332.5 apiece. The stock has gained 15% in the past year.

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