Nestle India Maintains Neutral Outlook, Target Price Set at Rs 1400: Motilal Oswal Research

Nestle India Reports Strong Quarterly Performance

Nestlé India, a leading food and beverage company, has reported a strong performance in the fourth quarter of financial year 2026 (4QFY26). The company's revenue grew by 23% year-over-year (YoY), surpassing market expectations and achieving a two-year compound annual growth rate (CAGR) of 13%. This significant growth was driven by double-digit volume expansion in the domestic market.

Domestic revenue growth was a key driver of Nestle's overall performance, increasing by 23% YoY, exceeding the research firm's estimated growth of 17%. The company's milk products and nutrition segments showed steady growth, while most other categories delivered double-digit growth. Nestle's market share gains in key segments reflect the company's improved execution efforts. The company's export revenue also saw a significant increase of 31% YoY.

Revenue Growth Comparison

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Looking ahead, Nestle's research firm models a revenue/EBITDA/APAT compound annual growth rate (CAGR) of 12%/15%/17% over the financial years 2026-2028. The company's stock is currently trading at a premium valuation, with a price-to-earnings (P/E) ratio of 68x for financial year 2027 and 60x for financial year 2028. Given this expensive valuation, the research firm reiterates its Neutral rating on the stock with a revised target price of INR1,400, based on a P/E ratio of 60x for financial year 2028.