ICICI Securities Maintains Buy Call on Nestle India, Targets Rs 1650

Nestlé India Reports Volume-Led Recovery in Q4FY26

Nestlé India has delivered a significant 23% year-over-year (YoY) growth in Q4FY26, with implied volumes of 18% YoY, indicating a volume-led recovery in the company. This growth is notable, as it suggests that the recovery is driven by underlying demand and distribution gains, rather than pricing or base effects. The broad-based gains across categories and channels, including continued traction in the general trade (GT) and rural markets, reflect stronger execution and distribution depth.

The company continues to invest in its brands, prioritizing penetration and demand buildout over near-term margin delivery. While input costs remain elevated, albeit improving, the reinvestment cycle is expected to support operating leverage as volumes sustain. This strategy is expected to yield meaningful leverage as the company scales its operations.

Outlook and Earnings Estimates

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In light of the company's performance, ICICI Securities has raised its earnings estimates by 8.7% and 6.9% for FY27 and FY28E, respectively. The revised estimates model revenue, EBITDA, and adjusted PAT compound annual growth rates (CAGRs) of 13%, 14%, and 14% over FY26-28E. This upward revision reflects the company's ability to sustain its growth trajectory and capitalize on the recovery in the market.

Recommendation

ICICI Securities maintains a BUY rating on Nestlé India, with a DCF-based revised target price of INR 1,650, up from INR 1,550 previously. This revised target price reflects the company's strong growth prospects and its ability to deliver sustained revenue and earnings growth.

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