Shares of Nestle India hit over 1-month high as the company plans to focus on volume growth.
The stock jumped as much as 4.8 per cent to Rs 6,920, its highest since July 21.
The company plans to to focus aggressively on driving volume growth through new product launches and other initiatives, analysts say, citing a call with the management.
Credit Suisse has upgraded the stock to “outperform” from "underperform''. The rating agency says it is “convinced that a turnaround is finally underway” after Nestle's investor call.
It adds that the margins will drop in the turnaround phase due to higher spending on advertisements but are expected to pick up from 2018 and expects sustained intensity of new product launches over the next 2-3 years.
Morgan Stanley has issued a more cautious note. It has cut the price target to Rs 5,650 from Rs 5,700 and maintained "underweight” rating.
The rating agency said that recovery at Nestle will be more gradual due to issues with its core product portfolio.
Nestle shares had gained 9.5 per cetn this year as of Friday's close, underperforming a 23.1 per cent gain in the Nifty Fast-Moving Consumer Goods index.