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Nestle India Ltd. reported Q3 FY26 results ahead of Dolat Capital’s estimates, with strong growth across domestic and export markets. Domestic sales rose 18.3% YoY, while exports increased 22.9% YoY, supported by sustained category momentum. The company’s revenue has grown at a 10.5% CAGR over five years, underscoring its stable fundamentals.
Gross margin declined 70 basis points YoY to 55.7% as inflationary pressures continued. Coffee prices eased on better crop yields in Vietnam and India, but edible oil and milk prices remained elevated. Management noted that wheat harvest prospects for April 2026 appear strong; however, raw‑material costs are expected to weigh on margins in the near term.
Following the earnings beat, Dolat Capital raised its FY26/27/28 EPS estimates by 0.5/0.3/1.4% to Rs 17.8/Rs 20.4/Rs 22.7. The brokerage expects Nestle to sustain strong long‑term growth, supported by its leadership across categories, brand strength, and benefits from GST reduction boosting volumes.
Despite the upward revisions, Dolat Capital reaffirmed its ‘Reduce’ rating, citing limited upside, and increased its target price to Rs 1,363 from Rs 1,300, valuing the stock at 60x FY28E EPS.
Click on the attachment to read the full report:
Dolat Capital Nestle India Q3fy26 Results Review.pdf
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