Nestle India shares extended their losses on Friday after plunging nearly 8 percent in the previous session following the company's fiscal second quarter earnings. Brokerage HSBC maintained its 'Hold' rating on the stock with a target price of Rs 1,480, implying an upside of around 16 percent from Thursday's closing price. It cautioned that revenue growth could moderate in the second half of FY27.

Nestle India shares declined 1.05 percent to Rs 1,262.40 in early trade on Friday, extending Thursday's 7.8 percent slump. Despite the sharp two-day decline, the stock remained down just 1.5 percent so far in 2026, significantly outperforming the Nifty 50, which has fallen around 12 percent during the same period. The company's market capitalisation stood at Rs 2.46 lakh crore.

HSBC said that Nestle India's revenue grew around 20 percent year-on-year in the July-September quarter, broadly in line with estimates, while its two-year revenue compound annual growth rate (CAGR) stood at 15 percent. EBITDA exceeded consensus expectations by approximately 3 percent.

The brokerage highlighted sequential improvement in Nestle India's nutrition business, while chocolates and coffee continued to deliver strong performance. However, HSBC cautioned that the company's growth momentum could moderate in the second half of the financial year.

Nestle India reported a 35.9 percent year-on-year increase in consolidated net profit to Rs 1,009.6 crore for the quarter ended September 2026, while revenue from operations rose 20.3 percent to Rs 6,788.3 crore. On a standalone basis, net profit rose 36.2 percent to Rs 1,026.8 crore, exceeding CNBC-TV18's poll estimate of Rs 1,018 crore. Standalone revenue increased 20.3 percent to Rs 6,788.3 crore, broadly matching the poll estimate of Rs 6,789 crore.

The company's EBITDA margin stood at 23.8 percent, while advertising and marketing expenditure surged 46 percent as Nestle stepped up investments in its brands.

Nestle India flags rising food inflation, commodity cost pressures

Despite the strong quarterly performance, Nestle India shares came under heavy selling pressure on Thursday as the company's management highlighted rising inflation and continued commodity cost challenges. "Rising inflation, particularly food inflation, is a reality," Chairman and Managing Director Manish Tiwary said, adding that the company would focus on productivity improvements and operational efficiencies to mitigate commodity cost pressures.