Nestle India reported a double-digit decline in profit for the second quarter of FY26 on account of higher input costs. Standalone net profit fell 23.6% year-on-year to Rs 753 crore, below Bloomberg consensus estimates of Rs 791 crore.
Earnings before interest, taxes, depreciation, and amortisation (Ebitda) margins contracted 100 basis points to 21.9% versus 22.9% in the year-ago period, amid higher milk and cocoa prices, though the outlook for these commodities remains positive, the company said on Thursday.
Shares of Nestle India jumped 5% intra-day on the BSE to Rs 1,281 apiece on Thursday, as investors shrugged off the profit decline. The stock closed trade at Rs 1,276.55, up 4.5% versus Wednesday’s close.
Revenue rose 10.6% y-o-y to Rs 5,644 crore, beating Bloomberg consensus estimates of Rs 5,185 crore for the period. Domestic sales, in particular, was up 10.8% y-o-y to Rs 5,411 crore, marking its highest-ever sales in any quarter. Ebitda was up nearly 6% y-o-y to Rs 1,237 crore.
On a consolidated basis, net profit fell 17% y-o-y to Rs 743 crore, while revenue came in at Rs 5,645 crore, up 10% from the year-ago period.
The company said that it saw milk prices softening after the festive season, coinciding with the onset of the flush season. Coffee prices were expected to stabilise as the upcoming crops in Vietnam and India were likely to be normal.
The global supply and demand for cocoa was projected to balance, primarily due to a correction in demand over the past two years while edible oil prices were likely to remain firm and could rise further due to a tight supply and demand at the global level.
“Three out of four product groups delivered strong volume-led double-digit growth (in Q2),” Manish Tiwary, chairman & MD, Nestle India, said. He added that the recent Goods and Services Tax (GST) rate cuts were expected to stimulate consumption across product categories.
“We have been working closely with our partners, distributors, wholesalers, and retailers, to pass on the benefits of the revised GST rates across our product groups to our consumers,” Tiwary said.
Meanwhile, its pet food business reported high double-digit growth, achieving its highest turnover since its integration into the Nestlé India business, the company said. The firm entered the pet food market through its 2022 acquisition of Purina Petcare India. In May this year, it acquired a minority stake in the Indian pet food company Drools.
Nestle India, Tiwary said, would continue to focus on volume growth to ensure their presence across diverse geographies and platforms. “We will invest in growth by accelerating our investments in brands and manufacturing capacity, bringing forth innovations that are bolder, bigger, and better,” he said.