Nestle India (NEST.BO): Beat-and-Raise Cycle Continues - Buy

Research evidence excerpt

Nestle India (NEST.BO): Beat-and-Raise Cycle Continues - Buy

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22 Jul 2026 10:18:29 ET │ 17 pages

Nestle India (NEST.BO)

Beat-and-Raise Cycle Continues - Buy

CITI'S TAKE

Nestlé India delivered a third consecutive quarter of beat-and-raise

performance, with revenue/EBITDA/PAT growing 25%/40%/49% YoY. The

performance was volume-led (we estimate ~16% volume growth in 1QFY27) Buy

and broad-based, with all four segments delivering strong double-digit Price (22 Jul 26 15:30) Rs1,492.20

growth. We believe the growth trajectory is being driven by: (a) rural

distribution expansion supporting category penetration gains, (b) strong e- Target price Rs1,750.00↑

commerce momentum, (c) accelerated premiumisation across categories, from Rs1,675.00

and (d) sustained increases in A&P investments. Importantly, despite a Expected share price return 17.3%>40% YoY increase in A&P spends, EBITDA margin expanded 240bps YoY to

24.2%, supported by gross margin expansion (+200bps YoY) and operating Expected dividend yield 1.1%

leverage. We expect investor focus to remain on the sustainability of volume Expected total return 18.3%

growth, particularly as the base becomes incrementally tougher from Market Cap Rs2,877,431M2QFY27 onwards. However, we believe the structural growth drivers remain

intact and should support a healthy growth trajectory (we estimate ~13% US$29,898M

revenue growth for the remainder of FY27E). Reiterate Buy.

1QFY27 results — Revenue at Rs63.8bn (+25%) – vs. Citi/cons. ests. of Rs61.9bn/

Rs60.6bn. Domestic business also grew 25% YoY. EBITDA at Rs15.4bn (+40%) – vs. Price Performance

Citi/cons. ests. of Rs13.4bn/Rs13.5bn; EBITDA margin at 24.1%, +250bps YoY. (RIC: NEST.BO, BB: NEST IN)

Recurring PAT at Rs9.8bn (+49%), vs. Citi/cons. PAT ests. of Rs8.2bn/Rs8.4bn.