Nestle India (NEST IN) – Q2FY26 Result Update – Strong volume beat, input pressures peaked out – HOLD
Published on 16 Oct 2025
NESTLE posted a strong quarter with 10.6% sales growth and flattish EBIDTA as margins declined 97bps given impact of elevated commodity prices (coffee, cocoa, milk and palmoil), higher operational costs (expansion in capacity. We expect high single digit to low double- digit volume growth in coming few quarters on the lines of GST transition gains in FY18 led by Maggi, Nescafe (powder + RTD) and Chocolates (Wafers and milk chocolates).
NEST faces structural increase in competition in segments like Instant Noodles and Nutrition, which remains a key drag. We estimate EPS CAGR of 14.7% over FY26-28. The stock trades at 59xFY28 EPS. We assign DCF based target price of Rs1359 (Rs1222 earlier). Downside seems capped given expected acceleration in volumes.
