Nestle's Blockbuster Q1 Is Hard To Ignore. But Jefferies Isn't Chasing The Rally — Here's Why Nestle India’s June-quarter (Q1FY27) earnings delivered a strong operational performance, with net profit surging 48% year-on-year to Rs 975 crore and revenue rising 25.2% to Rs 6,378 crore. The company also reported a 39.7% jump in EBITDA to Rs 1,537 crore, driven by improved margins that climbed to 24.1% from 21.6% a year earlier. Despite these robust figures, brokerages have offered mixed assessments, with Jefferies maintaining a Hold rating while Macquarie expressed optimism about the stock’s potential. The debate among analysts centers on valuation rather than execution. Jefferies acknowledged the quarter as “another blockbuster” but argued that much of the optimism is already priced into the stock. The brokerage raised its target price to Rs 1,425 from Rs 1,325, citing broad-based growth across product categories and sales channels. However, it warned that growth rates may moderate in the second half of FY27 and suggested investors might find better opportunities in the FMCG sector. Jefferies also highlighted Nestle’s valuation of around 70 times one-year forward earnings, which it views as leaving little room for error. Macquarie, on the other hand, praised the company’s sales-led beat, attributing it to stronger gross margins and favorable input costs. The brokerage increased its target price to Rs 1,575 from Rs 1,400, emphasizing that margins are supported by the higher-margin infant nutrition business and benign inflation in key inputs. It also noted that gross margins are expected to remain healthy, bolstered by the performance of the Powdered and Liquid Beverages business, which recorded its 20th consecutive quarter of double-digit growth.#macquarie #jefferies #fmcg_sector #nestle_india #nestle
