Kunal Singh 18 October 2026

Nestle India Share Price Target at Rs 1,755: BOB Capital Markets

BOB Capital Markets has upgraded Nestle India to BUY from HOLD with a target price of Rs 1,755, implying about 38% upside from the Rs 1,276 close on October 15, 2026. The brokerage said the September quarter was broad-based, with consolidated revenue up 20.3% to Rs 6,788 crore on double-digit volume growth across confectionery, beverages, prepared dishes and milk products. Gross margin widened 260 basis points to 56.9% on softer raw materials, lifting EBITDA 30.6% and net profit 35.9% even as advertising spends jumped about 46%. BOBCAPS values the stock at 68 times September 2028 earnings, citing a more attractive risk-reward after the correction.

UPGRADED TO BUY
Q2FY27 Result Review
Packaged Foods

Nestle India: BOBCAPS Turns Buyer as Volumes Lift Every Shelf

A 20% revenue quarter, wider gross margins and a cheaper stock prompt BOB Capital Markets to move from HOLD to BUY with a Rs 1,755 target.

Investment Facts

Serving size: 1 share · 12-month horizon

Per share

RatingBUY HOLD

Current priceRs 1,276

Target priceRs 1,755

Upside~38%

52-week rangeRs 1,159 – 1,553

Valuation basis68x Sep-28E EPS

Ingredients: volume growth, premiumisation, rural reach, quick commerce. Contains market risk. Price as of October 15, 2026.

BOB Capital Markets, the brokerage arm of Bank of Baroda, has upgraded Nestle India to BUY from HOLD and set a target price of Rs 1,755. The upgrade, published October 16, 2026, follows a September quarter in which the maker of MAGGI, KITKAT and NESCAFÉ grew in every product group, chiefly through volumes rather than price. With the stock trading closer to its 52-week low than its high, the brokerage argues the correction has opened an attractive risk-reward window.

Rating	CMP	Target	Upside	52-wk high / low	Promoter / FPI / DII
BUY (from HOLD)	Rs 1,276	Rs 1,755	~38%	Rs 1,553 / Rs 1,159	63% / 10% / 12%

A Quarter Driven by Volume, Not Price

Consolidated revenue rose 20.3% YoY to Rs 6,788 crore in Q2FY27 and 6.4% sequentially, a touch ahead of BOBCAPS' Rs 6,717 crore estimate. The brokerage stressed that the growth was volume-led and broad-based. General trade grew in double digits across town classes, led by rural markets. Organised trade and e-commerce also contributed, and quick commerce emerged as a meaningful engine on the back of better availability and channel-specific assortments.

Profitability outpaced sales. EBITDA climbed 30.6% to Rs 1,616 crore, and reported net profit rose 35.9% to Rs 1,010 crore, as a lighter interest bill and operating leverage flowed through.

Rs crore	Q2FY27 actual	BOBCAPS estimate	Beat	Q2FY26	YoY
Revenue	6,788.3	6,716.7	+1.1%	5,643.6	+20.3%
EBITDA	1,615.5	1,544.8	+4.6%	1,236.6	+30.6%
EBITDA margin	23.8%	22.6%	+125 bps	21.9%	+189 bps
Reported PAT	1,009.6	994.6	+1.5%	743.2	+35.9%

What Went Into the Margin Recipe

Gross margin widened 260 basis points to 56.9% as raw material costs moderated and the product mix improved. Rather than bank all of it, Nestle reinvested heavily: advertising and promotion spends rose roughly 46% YoY, pushing other expenses up 30% to 24.7% of sales. Employee costs fell to 8.4% of sales from 9.5%. The measuring jugs below show each line as a share of revenue, a year ago against this quarter.

Raw materials
45.7% → 43.1%

Employee costs
9.5% → 8.4%

Other expenses (incl. A&P)
22.9% → 24.7%

EBITDA margin
21.9% → 23.8%

Grey jug: Q2FY26. Coloured jug: Q2FY27. Each graduation marks 12% of sales. Source: Company, BOBCAPS Research.

Every Aisle Pulled Its Weight

PREPARED DISHES & COOKING AIDS

MAGGI noodles led on deeper rural penetration. Masala-e-Magic pushed regional dish usage, while Double Masala, the Spicy range and MAGGI Veg Atta widened the franchise.

CONFECTIONERY

Double-digit volume growth again, with share gains in KITKAT and momentum in MUNCH and MILKYBAR. KITKAT Delights Choco Lava and a Formula 1 gift tin on e-commerce lifted the premium end.

POWDERED & LIQUID BEVERAGES

NESCAFÉ GOLD sustained double-digit growth, CLASSIC recruited households and a reformulated SUNRISE strengthened the chicory segment. Ready-to-drink cold coffee is scaling rapidly.

MILK PRODUCTS & NUTRITION

Broad-based growth backed by brand investment and portfolio pruning. Nutrition strengthened sequentially, with toddler products gaining share.

NESPRESSO, PET FOOD & EXPORTS

Pet food grew in double digits on new FELIX, PRO PLAN and FRISKIES cat ranges. Exports also grew in double digits, helped by MAGGI in Canada and NESCAFÉ SUNRISE in five West African markets.

OUT-OF-HOME

Nestlé Professional delivered robust, double-digit, volume-led growth through premium offerings, customer retention and new out-of-home solutions.

The Pantry Check: Commodity Outlook

Management flagged rising food inflation and commodity volatility as the principal challenges. BOBCAPS relays the following outlook for key inputs, which the company plans to offset through innovation, productivity and efficiency gains.

Coffee

Range-bound

Wheat

Range-bound

Sugar

Stable, elevated

Edible oil

Stable, elevated

Cocoa

Volatile

Milk

Firm, easing ahead

Estimates Nudged Higher

BOBCAPS raised its revenue forecasts by about 2.3% for FY27-FY29 and adjusted profit by 2.2% to 3.6%. It now expects revenue, EBITDA and EPS to compound at roughly 13.1%, 15.1% and 15.4% respectively over FY26-FY29. Notably, its FY27 EPS of Rs 19.7 sits below the Rs 22.0 consensus, suggesting the call does not lean on aggressive assumptions.

Rs crore / ratio	FY26A	FY27E	FY28E	FY29E
Revenue	23,154.6	26,960.5	30,027.0	33,486.7
EBITDA	5,306.1	6,221.2	7,294.4	8,093.5
Adjusted net profit	3,423.8	3,808.0	4,690.7	5,265.4
Adjusted EPS (Rs)	17.8	19.7	24.3	27.3
Adjusted ROAE	67.9%	65.7%	72.7%	72.6%
EV/EBITDA	23.2x	19.8x	16.9x	15.2x

Valuation: The Multiple Shrinks as Earnings Grow

BOBCAPS values Nestle India at 68 times September 2028 estimated EPS, which works out to an implied EPS of about Rs 25.8 and the Rs 1,755 target. At today's price, the stock's adjusted P/E compresses steadily as earnings compound, shown below as a stack of tins narrowing with each year.

FY29E · 46.7x

FY28E · 52.4x

FY27E · 64.6x

FY26A · 71.9x

Adjusted P/E at Rs 1,276. Tin width proportional to the multiple. Source: BOBCAPS Research.

The balance sheet supports the premium. Nestle ended FY26 with about Rs 1,321 crore in cash against negligible debt of Rs 24 crore, and BOBCAPS projects a dividend of Rs 16.5 per share in FY27. The brokerage cautioned that the higher base in the second half of FY27 will test whether the growth momentum is sustainable.

KEY RISKS FLAGGED BY BOBCAPS

Input cost inflation, particularly in cocoa and milk, could erode the gross-margin gains.

A weak rural recovery would blunt the general-trade engine that led this quarter.

Higher volume elasticity at current elevated price points could slow consumption if prices rise further.

EDITOR'S NOTE

The source report contains several internal inconsistencies. This article uses the consolidated quarterly table (Fig 1) wherever figures conflict.

1. The cover bullet says revenue grew 10.3% YoY, while the text says 20.5% and the table shows 20.3%.

2. The same bullet reads "upgrade HOLD", but the rating box and valuation section say the stock was upgraded to BUY from HOLD. The 38% upside fits the house's BUY band of more than 15%.

3. EBITDA margin expansion is stated as 212 basis points; the table's 21.9% to 23.8% move equals 189 basis points.

4. The commentary cites sales of Rs 6,782.2 crore and PAT of Rs 1,026.8 crore (up 36.3%), against Rs 6,788.3 crore and Rs 1,009.6 crore (up 35.9%) in the table. The gap may reflect a standalone versus consolidated basis, which the report does not specify.

5. The valuation chart is titled "trading at 12.2x 1-year forward P/E vs historical average of 51.7x since IPO", which cannot be reconciled with the 64.6x FY27E P/E elsewhere in the report. That figure has been disregarded.

6. The stated market capitalisation, about Rs 1.16 lakh crore when converted from US dollars at roughly Rs 89, appears low. Profit and EPS figures imply about 192 crore shares, or roughly Rs 2.46 lakh crore at Rs 1,276. This is an editorial inference.

Sources: BOB Capital Markets Ltd (BOBCAPS) Result Review, Nestle India, October 16, 2026; company disclosures; NSE; Bloomberg (as cited in the report).

Disclaimer: This TopNews report is based on a third-party brokerage research report and is for informational purposes only. It is not investment advice or a recommendation to buy or sell any security. Investments in the securities market are subject to market risks. Read all related documents carefully and consult a registered financial adviser before investing.

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