Archive · 25 Jul 2025
Nuvama Cuts Nestle India Target Amid Margin Concerns
Nestle India's stock price is affected by a recent report.
Nuvama, an investment firm, lowered its price target for Nestle India because their profits went down.
This was because the company's costs for things like coffee went up, which lowered their profit margins.
However, the company is still growing its sales and some of its products are doing well.
The price of coffee is going down, which could help improve things in the future.
Overall, the company's profits are down, but sales are up.
Nuvama cut Nestle India's target price due to margin contraction.
Nestle India's shares fell 5% after reporting quarterly results.
Gross margin contracted by 250 basis points due to high coffee costs.
Prepared dishes and cooking aids saw volume growth, with seven brands growing in double digits.
Consolidated net profit fell 13.4% YoY, while revenue grew 6% YoY.
- Who
- Nuvama Institutional Equities and Nestle India are the main actors.
- What
- Nuvama cut the target price for Nestle India due to concerns about margin contraction and released the Q1FY26 results.
- When
- The report is based on Nestle India's Q1FY26 results.
- Where
- The report focuses on Nestle India's financial performance.
- Why
- The target price cut was due to margin contraction, specifically from high coffee costs, leading to a drop in net profit.
Market Concerns
Company Resilience
Investment Outlook
Market Concerns
Nuvama reduced the target price due to margin contraction and decreased EPS estimates.
Company Resilience
Despite challenges, Nuvama maintains a 'Buy' rating, citing growth in key categories and favorable commodity prices.
- Target Price Cut
- Rs 2,820 (from Rs 2,825)
- Share Price Decline
- 5%
- Gross Margin Contraction
- 250 basis points YoY
- Net Profit (Q1FY26)
- Rs 647 crore (down 13.4% YoY)
- Revenue (Q1FY26)
- Rs 5,096 crore (up 6% YoY)
- Volume Growth (Q1FY26)
- 3% YoY