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Investing.com - Phillip Securities has upgraded Nestle India Ltd (NS:NEST) from Neutral to Buy, raising its price target to INR1,430.00 from INR1,265.00.
The upgrade follows Nestle India’s strong performance amid the GST transition, with approximately 11% year-over-year sales growth backed by high single-digit domestic volume growth, marking a return to double-digit growth after nearly two years.
Phillip Securities attributes the strong quarter to an early start to the festive season and effective execution of Nestle’s omni-channel strategy, though margins were slightly weak with Gross Margin at 54.2%, down 216 basis points year-over-year due to elevated raw material costs.
Under its new CEO, Nestle India is intensifying its penetration-led growth strategy by increasing investments in brands, innovation, distribution, and capacity expansion, including a new Maggi production line at the Sanand factory.
Phillip Securities views the recent GST rate cut as a structural positive, with Nestle’s entire portfolio now under the lower 5% tax bracket, and expects volume growth to strengthen further, aided by a recovery in urban consumption.
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