CLSA flags regulatory overhang for Nestle India after food safety action

** CLSA says regulatory action by India's food regulator could weigh on Nestle India NEST.NS, given the importance of its nutrition business

** Brokerage notes milk products and nutrition contribute about 33% of sales and an even higher share of profitability

** FSSAI said it had found a Nestle baby food sample to be substandard and was pursuing legal action against the Swiss company in one of its biggest growth markets.

** Shares of Nestle India flat at 1,372 rupees

** Nestle India maintains its products are "fully compliant with all the applicable regulations" and that it will continue cooperating with the food regulator

** Stock rated "buy" on average by 35 analysts; median PT is 1,597.50 rupees, according to LSEG-compiled data

** Stock up 6.7%, YTD