Nestlé India Limited

Consumer Defensive — Packaged Foods · NSE

₹1,265.50−₹10.30 (−0.81%)

DalalBaazaar Score

72 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by high debt relative to equity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:59 pm

Understanding the Business

Company site ↗

The 60-second version of Nestlé India Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Nestlé India Limited engages in the manufacture and sale of food products in India and internationally.

IndustryPackaged Foods

SectorConsumer Defensive

Employees8,356

Annual revenue₹20,078 Cr

How does it make money?

Turns over ₹20,078 Cr a year. Of every ₹100 of sales, about ₹16 reaches shareholders as profit, with ₹24 left at the operating level before interest, tax and depreciation. Each of its 8,356 employees supports ₹2.40 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.40 Cr

Who are its competitors?

The closest listed comparisons in its industry are BRITANNIA INDUSTRIES LTD, TATA CONSUMER PRODUCT LTD, DABUR INDIA LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of the level reported are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE17.2%

What is the outlook?

33 analysts covering the stock expect revenue to grow about 11.5% and earnings to grow about 14.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+11.5%

Est. earnings growth+14.9%

Analysts33

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 2 years revenue moved +37% while net margin moved +11% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+37%

Margin effect+11%

DalalBaazaar Score

72/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 59.8x is demanding — it needs sustained high growth to justify
✓ P/E is 34% below its own historical median of 90.0x — cheap by its own standards
✗ P/B of 42.21x is a steep premium to book

Quality vs. Valuation

Company Quality

77/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

39/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

59.8x

5Y Median

90.0x

56 monthly readings · mean 89.2x · range 69.3x–108.5x

Sector Median

44.1x

median of 3 sector peers

🟢Current valuation is approximately 34% below its 5y median of 90.0x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 36% above the peer median of 44.1x.

vs. its own history

Cheap

90.0x median over 56 months · -34%

vs. sector peers

Expensive

44.1x median of 3 peers · +36%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

51.0x

PEG

2.60

What's Good / What's Bad

🟢 What's Going Well1

Return on capital is rising
ROCE has improved from 55.9% to 59.3%.

🔴 What Needs Attention1

Return on equity is falling
ROE has dropped from 108.8% to 80.0% — each rupee of shareholder capital earns less than it did.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 338% over 2 years, from ₹266 Cr to ₹1,167 Cr.
🔴High leverageFinancial
Debt/Equity of 8.04x — earnings must service borrowings before shareholders see anything.
🔴Receivables growing faster than salesFinancial
Receivables up 119% against revenue up 37% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 79% against revenue up 37% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 34% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 8.04x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 119% against revenue up 37%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 36% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 108.8% to 80.0%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 13% a year✓ 17.0% CAGR
Latest reported year was 20.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 22%✓ 23.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹926 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5Valuation vs its own median of 90.0x✓ 59.8x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

8 / 11 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 2 neutral · 3 weak

Market Cap

₹2.44 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

59.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

42.21x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹21.15

Profitable

Profitable on a per-share basis

ROE

79.9%

Strong

Strong capital efficiency

ROCE

Not available

No data

Source didn't return this field

Debt/Equity

8.04x

High

High leverage

Revenue Growth (YoY)

20.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

35.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.95%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹3,656 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

51.0x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

ROA

25.4%

Good

Assets are working hard

Operating Margin

21.0%

Good

Healthy core-business profitability

Net Margin

16.0%

Good

Strong bottom-line conversion

Current Ratio

1.07

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.43

Defensive

Steadier than the market

52W Range Position

27%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1336.5 / 1404.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

35.3

Neutral momentum

Financial Trend (3-Year)

Metric	FY21	FY22	FY25	2Y CAGR
Revenue	₹14,665 Cr	₹16,790 Cr	₹20,078 Cr	+17.0%
EBITDA	₹3,684 Cr	₹3,837 Cr	₹4,804 Cr	+14.2%
EBITDA Margin	25.1%	22.9%	23.9%	—
PAT (Net Profit)	₹2,118 Cr	₹2,391 Cr	₹3,208 Cr	+23.1%
EPS	₹10.99	₹12.4	₹16.63	+23.0%
ROE	108.8%	97.2%	80.0%	—
ROCE	55.9%	57.8%	59.3%	—
Total Debt	₹266 Cr	₹271 Cr	₹1,167 Cr	+109.3%
Free Cash Flow	₹1,501 Cr	₹2,188 Cr	₹926 Cr	-21.5%

🟢 Revenue has grown at 17.0% a year over 2 years.

🟢 EBITDA has grown at 14.2% a year over 2 years.

🔴 EBITDA Margin has fallen from 25.1% to 23.9% over 2 years (-1.2 pts).

🟢 PAT (Net Profit) has grown at 23.1% a year over 2 years.

🟢 EPS has grown at 23.0% a year over 2 years.

🔴 ROE has fallen from 108.8% to 80.0% over 2 years (-28.9 pts).

🟢 ROCE has risen from 55.9% to 59.3% over 2 years (+3.4 pts).

🔴 Total Debt has grown at 109.3% a year over 2 years.

🔴 Free Cash Flow has shrunk at 21.5% a year over 2 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

—

Total Liabilities

—

Cash & Equivalents

₹1,294 Cr

Operating Cash Flow

—

Capex

—

Shareholding (proxy)

Institutional Holding

17.5%

Insider Holding

62.8%

Corporate Actions

Next Earnings

15 Oct 2026

Dividend Rate

₹12

Ex-Dividend Date

10 Jul 2026

Analyst Consensus

Recommendations

21 Buy · 10 Hold · 5 Sell

Target Price (Mean)

₹1,515.69

+19.8% vs CMP

Target Range

₹1,300 – ₹1,755

Peer Comparison

Company	P/E	ROE
BRITANNIA INDUSTRIES LTD	44.1x	51.0%
TATA CONSUMER PRODUCT LTD	59.3x	7.5%
DABUR INDIA LTD	34.7x	17.2%

Recent News

1 positive5 mixed

Nestlé India shares crash 9% despite strong Q2 numbers: What is spooking investors?

Upstox, 15 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Nestle India share price crashes 9% in intraday trade post Q2 results

Business Standard, 15 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Nestle Share Price Recover From Day's Low, Still Down 5% After Q2 Results

NDTV Profit, 15 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Nestle India Q2 results: Profit jumps 36%, revenue rises 20%; stock plunges 7% amid inflation concerns

Moneycontrol.com, 15 OctResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Nestle India Q2 Results: Here's why the stock fell up to 8% despite numbers meeting expectations

CNBC TV18, 15 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Nestle India Share Price: Price History and Q2 FY27 Update

Univest, 15 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability · Risk

MiddlingFinancial Health

WeakValuation

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 3 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑