Nestle Q2 review: Buy or sell? New MD, GST cuts sway analysts' views

Nestle share price rose 8 per cent in two-days of releasing its Q2FY26 results; here's what brokerages recommend

Nestle India reported its second quarter (Q2FY26) numbers on Thursday, during market hours. Brokerages have exhibited confidence in the new Managing Director, Manish Tiwary, as they see top line growth revival under his leadership.  At 9:17 AM, Nestle share price was trading 2.46 per cent higher at ₹1,308 per share, extending rally for the second day, rising 8 per cent in two-days. In comparison, BSE Sensex was down 0.08 per cent at 83,398.83. On Thursday, Nestle India's share price closed 4.5 per cent higher to ₹1,276.55 per share.

Nestle Q2 results: Key highlights

• Nestle India reported a 17.4 per cent year-on-year (Y-o-Y) drop in net profit to ₹743.2 in Q2FY26 from ₹899.5 crore, as the same quarter last year included an exceptional item. 
• Revenue for the quarter grew 10.5 per cent Y-o-Y to ₹5,643.61 crore, as against ₹5,104 crore.
• Net sales rose 10.6 per cent to ₹5,643.6 crore from ₹5,104 crore a year ago.
• Domestic sales jumped to ₹5,411 crore from ₹4,883.1 crore Y-o-Y – the highest ever recorded by the company.
• The total expenses of Nestle India rose 12.9 per cent to ₹4,616.73 crore in Q2FY26.

Brokerages' view on Nestle India Stock

Emkay Global Financial has maintained a ‘Reduce’ rating on Nestle stock with a target of ₹1,250 per share. The brokerage believes Nestle's new leadership will prioritise reviving topline growth, which was  evident in Q2FY26, with domestic sales growth at 11 per cent, driven by high single-digit volume growth; increased promotional activity likely supported the performance. 

 

“Given favourable industry tailwinds from goods and services tax (GST) rate reduction, we believe the management's topline focus is prudent,” Emkay noted. 

 

Additionally, analysts see current margins as healthy and unlikely to expand materially ahead. “We project 9 per cent sales and 12 per cent earnings compound annual growth rate (CAGR) over FY25-28E,” said Emkay. 

 

ICICI Securities has maintained a ‘Buy’ on Nestle stock for a target of ₹1,500 per share. The brokerage is optimistic about the company’s long-term performance, given: 

• It is one of the key beneficiaries of the GST rate rationalisation, which is expected to boost volumes and affordability.
• Early signs of demand recovery in infant nutrition.
• Margin improvement on account of benign raw material prices (except edible oils) and continued focus on premiumisation.
• Sustained distribution expansion.
• New growth vectors under the new managing director.

Motilal Oswal has reitered its 'Neutral' rating with a target of ₹1,300 per share, given the stock's expensive valuation.  The brokerage has marginally raised its earnings per share (EPS) estimates for Nestle India by approximately 2 per cent for FY26–FY28, anticipating that GST reforms will stimulate consumption, enhance affordability, and drive overall growth in the FMCG sector, with Nestle poised to benefit significantly as about 85 per cent of its portfolio has seen GST rate reductions.  Additionally, under the new MD, Manish Tiwary, the company's "RURBAN" strategy has already spurred stronger growth in rural and urban markets through improved distribution and increased packaged food adoption in smaller towns. Nestle continues to innovate and premiumise its portfolio, and its relatively protected market position requires limited overheads to defend share, Motilal Oswal noted. 

Nuvama Institutional Equities maintained ‘Buy’ on Nestle shares and raised the target slightly to ₹1,495 per share from ₹1,410. 

 

“Given a beat in numbers, GST cuts and improving consumption, we are slightly raising FY27E/28E EPS along with a roll forward,” Nuvama said.