Nestle India (NEST IN) – Q1FY27 Result Update – Strong volume led momentum continues – ACCUMULATE
Published on 22 Jul 2026
Nestlé delivered a strong quarter, reporting 25.2% YoY revenue growth and 39.8% YoY EBITDA growth, with margins expanding 252 bps led by operating leverage from lower staff and raw material costs. We expect sales momentum to remain healthy in 2QFY27, supported by a relatively low base.
However, growth is likely to moderate in 2HFY27 as the base normalizes, although we are not factoring any demand impact or input cost inflation due to potential El Niño-led impact. We believe margins have very limited room for an upside as coffee, cocoa and palmoil might become volatile due to super El Nino globally. We estimate EPS CAGR of 17.8% over FY26–28. The stock currently trades at 60.7x FY28 EPS. We remain positive operationally and raise DCF-based target price to Rs1,606 (Rs1,504 earlier). We expect steady but moderate returns given rich valuations.
