Nestle India Ltd. was listed on the NSE on November 8, 1994. Since listing, the company has given a massive return of more than 9500% to its investors. Will Nestle continue to provide such great returns in the future as well? Let’s explore Nestle’s growth potential and Nestle share price target from 2025 to 2050 in this article
About Nestle
Nestle is a large food and drink company that started in 1866 in Switzerland by Henri Nestle. In the beginning, it made baby food, but later, it started making many other things like coffee, chocolates, noodles, and dairy products. Some of its famous products are Maggi, Nescafe, KitKat, and Lactogen. Today, Nestle sells food and drinks in many countries and focuses on making tasty and healthy products.
Nestle Business Model
- Selling Food and Drinks: Nestle makes and sells products like chocolates, coffee, noodles, dairy, and baby food.
- Popular Brands: Nestle owns well-known brands like Maggi, KitKat, and Nescafé, which helps it sell more and make more profit.
- Health and Nutrition Products: The company makes baby food, protein drinks, and medical nutrition products.
- Bottled Water and Pet Food: Nestle sells bottled water and pet food under different brands, which are also big sources of income.
- Online Sales and Restaurants: Nestle sells products on websites and apps and also supplies food items to restaurants, hotels, and cafes.
Nestle Fundamental Analysis
| Stock Name | Nestle India Ltd. |
|---|---|
| Market Cap | ₹ 2,15,971 Cr. |
| 52W High | ₹ 2,778 |
| 52W Low | ₹ 2,131 |
| Stock P/E (TTM) | 68.8 |
| Book Value | ₹ 41.4 |
| Dividend Yield | 0.76% |
| ROCE | 169% |
| ROE | 135% |
| Face Value | ₹ 1.00 |
| Shareholders | Mar 2023 | Mar 2024 | Dec 2024 |
|---|---|---|---|
| Promoters | 62.76% | 62.76% | 62.76% |
| FIIs | 12.06% | 12.10% | 10.27% |
| DIIs | 9.19% | 9.00% | 10.80% |
| Public | 15.99% | 16.14% | 16.17% |
| No. of Shareholders | 1,87,365 | 4,10,144 | 5,47,850 |
Key Factors Driving Nestle Future Growth
- Making Healthier Food: Nestle is creating food with less sugar and healthier ingredients to attract more people who care about their health.
- Selling More Online: Nestle is selling more products on shopping websites and apps, which helps reach more customers easily.
- Expanding to New Countries: Nestle is growing its business in different countries where more people are starting to buy packaged food.
- Strong and Famous Brands: Nestle owns popular brands like Maggi, KitKat, and Nescafe, which helps in selling more products worldwide.
- Eco-Friendly Packaging: Nestle is using better packaging and reducing waste to protect the environment, which makes customers trust the brand more.
- More Ready-to-Eat Food: Nestle is making quick and easy food like noodles and coffee because busy people want fast meal options.
- Growing Pet Food Business: Nestle’s pet food brand, Purina, is selling more because more people now have pets and want good-quality food for them.
- Creating New Products: Nestle is using new ideas and technology to improve food quality and make exciting new products.
- Better Product Delivery: Nestle is improving how it delivers food to stores and online buyers so people can always find what they need.
- Buying Other Companies: Nestle is purchasing small food businesses to expand its product range and grow even faster.
Pros of Investing in Nestle India
- Strong Return on Capital Employed (ROCE): Nestle India’s return on capital employed (ROCE) is impressive, at 169% as of March 2024. This demonstrates that the company is effectively generating profits from its capital.
- Efficient Cash Conversion Cycle: As of March 2024, the company’s negative cash conversion cycle was -24 days. This means Nestle India receives payments from customers faster than it needs to pay its suppliers, which improves cash flow.
- Consistent Promoter Holding: The promoters have maintained a stable holding of 62.76% in the company up to September 2024, reflecting their confidence in the business.
- Robust Cash from Operating Activities: Nestle India generated Rs. 4,175 crores in cash from operating activities for the fiscal year ending March 2024, indicating strong operational efficiency.
- Low Debt Levels: The company’s borrowings were relatively low at Rs. 370 crores as of September 2024, suggesting wise financial management.
Cons of Investing in Nestle India
- Slowing Revenue Growth: In the quarter ending June 2024, Nestle India reported a revenue increase of just 3.3%, marking its slowest growth in eight years.
- Declining Profit Margins: For the quarter ending September 2024, the company experienced a nearly 9% drop in profit, primarily due to increased ingredient costs and weakened demand for packaged foods. Expenses rose by 3.4%, while revenue saw a modest growth of 1.3%, the slowest in eight years.
| Years | Target Price |
|---|---|
| Nestle India Share Price Target 2025 | ₹2600 to ₹2800 |
| Nestle India Share Price Target 2026 | ₹3120 to ₹3650 |
| Nestle India Share Price Target 2027 | ₹3760 to ₹4700 |
| Nestle India Share Price Target 2028 | ₹4500 to ₹6150 |
| Nestle India Share Price Target 2029 | ₹5400 to ₹8000 |
| Nestle India Share Price Target 2030 | ₹6500 to ₹11000 |
| Nestle India Share Price Target 2035 | ₹13000 to ₹33500 |
| Nestle India Share Price Target 2040 | ₹28000 to ₹100000 |
| Nestle India Share Price Target 2050 | ₹115000 to ₹500000 |
Conclusion
Nestle is a well-known company with popular products like Maggi, KitKat, and Nescafé. It has been growing steadily and has a strong presence in many countries. However, investing in Nestle India has some risks, like high stock prices and competition from other brands. There are also concerns about slower stock growth and lower dividend returns. However, Nestle focuses on making healthier products and being more environmentally friendly, which can help the company grow in the future. Investors should carefully think about the pros and cons before deciding to invest.
Disclaimer
This article is for educational purposes only. It is not a stock recommendation and should not be treated as such. Please ask your financial advisor before making any investment decision.
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