Nestle India (NEST IN) – Q2FY27 Result Update – Strong volume growth continues, Super El Nino a key risk – ACCUMULATE
Published on 15 Oct 2026
NEST 2Q27 results were largely in line, supported by (1) sustained strong volume growth momentum in 2QFY27, (2) relative stability in gross margins despite elevated RM basket, and (3) broad-based growth across Maggi, Chocolates and Beverages. NEST delivered a strong quarter, with revenue and EBITDA growing 20.3% and 30.5% YoY, respectively, while EBITDA margins expanded 187bps, aided by operating leverage and lower employee and raw material costs.
However, revenue and EBITDA growth might moderate in 2HFY27 as the base normalizes. We expect higher inflation to start hurting demand in 3Q27, however our estimates do not factor in any potential demand impact from an El Nino event. We see limited headroom for further margin expansion, given the potential volatility in Sugar, cocoa and palm oil prices amid the risk of super El Nino globally. We estimate an EPS CAGR of 16.4% over FY26–29E. At the current market price, the stock trades at 51.3/45.7x FY28E/FY29E EPS. While we remain constructive on the company's operational outlook, rich valuations will provide only steady returns in medium term. We maintain our DCF-based target price of Rs1,526 (earlier Rs 1,514).
