Nestle Q1: What should your investment strategy be? Brokerages decode

Business Standard

25-07-2025

Nestle India Q1 results review: The fast-moving consumer goods (FMCG) major Nestle reported its June quarter (Q1FY26) results on Thursday, during market hours. Post the result release, the stock fell and closed 5.4 per cent lower at ₹2,320.15 per share on BSE. The selling pressure was on the counter as the company's net profit slipped 13 per cent year-on-year (Y-o-Y) to ₹647 crore.
Nestle Q1FY26 results
Nestle, in the first quarter of FY26 (Q1FY26), reported a 13 per cent decline in the consolidated net profit Y-o-Y to ₹646.6 crore, as compared to ₹746.6 crore. However, its revenue from operations grew 5.8 per cent to ₹5,096 crore, from ₹4,814 crore a year ago.
Brokerage view on Nestle India
Most brokerages have cut their target price on Nestle India stock on higher inflation concerns, and elevated depreciation/finance costs due to higher capital expenditure.
ICICI Securities has maintained a 'Hold' on Nestle and has cut the target to ₹2,400 per share from ₹2,500. Nestle reported a stable quarter, according to the brokerage; however, the largest category, milk products and nutrition, appeared to be the problem child.
E-commerce salience at 12.5 per cent of revenue is good and could create a material unlocking opportunity if executed well, noted ICICI Securities. The brokerage said it will remain watchful of new growth vectors under Manish Tiwary, new CMD, effective August 1. 'Nestle India requires a strategy and execution refresh,' the brokerage note read.
Nuvama Institutional Equities has maintained a 'Buy' rating, but has cut the target to ₹2,820 per share from ₹2,825. The brokerage also lowered its FY26E/27E earnings per share (EPS) estimates by 6.8 per cent/4.1 per cent, as its sees depreciation/finance cost to remain elevated due to higher capex.
Motilal Oswal maintained a 'Neutral' rating with a target of ₹2,400 per share. According to the brokerage, going forward, the volume growth is expected to be in low single digits. Further, even though the capacity expansion will drive long-term growth, short-term margin pressure is expected to stay.
Macquaire also continued with a 'Neutral' rating on the stock and cut the target to ₹2,250 per share from ₹2,375, according to reports. The global brokerage sees near-term growth headwinds for Nestle as management commentary suggested milk and nutrition sales, the largest category of the company, are yet to recover and sees benign coffee prices hurting pricing growth in the beverages segment ahead.