As of January 30, 2025, Nestlé India’s stock is trading at ₹2,180.70, reflecting a 1.13% increase from the previous close.
Financial Performance of Nestle Share:
In Q2 FY25, the company reported a modest revenue growth of 1.3% year-over-year, which was below market expectations. Elevated costs of key commodities like coffee and cocoa led to a 144 basis points decline in operating profit margin, resulting in a 9.1% decrease in adjusted profit after tax.
Valuation Metrics:
Nestlé India’s Price-to-Earnings (P/E) ratio stands at 64.99, indicating a premium valuation compared to its peers.
Expert Recommendations:
- Sharekhan: Maintains a ‘Hold‘ rating with a target price of ₹2,681, citing concerns over muted revenue growth and margin pressures. moneycontrol.com
- Axis Securities: Recommends a ‘Buy’ with a target price of ₹2,640, expressing optimism about the company’s long-term prospects despite short-term challenges. moneycontrol.com
Conclusion:
Nestlé India is currently navigating short-term challenges, including subdued revenue growth and increased commodity costs, which have impacted its profitability. The stock is trading at a premium valuation, suggesting that investors have high expectations for its future performance. Given these factors, a ‘Hold’ position may be prudent for existing investors, while potential investors should carefully consider the high valuation and current market conditions before making investment decisions.
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