Packaged food major Nestle India cautioned on Tuesday that consumption would moderate in the coming months as the West Asia conflict, inflation, El Nino concerns and shipping disruptions pose risks to demand, costs and supply chains. The company, however, said it planned to continue investing in brands and capacity as it sought growth through higher volumes and premium products.
“Inflation is a concern, but given that we are on this long-term journey when it comes to penetration, rural consumption and premiumisation, I remain quite confident of our ability to handle these short-term blips,” Manish Tiwary, chairman and managing director of Nestlé India said during an analysts’ call on Tuesday.
Tiwary said the company was focused on affordability in a price-sensitive market. “We have the right price point packs. We have a lot of packs which work at Rs 5 and Rs 10,” he said. Last month, Nestle India had cut grammage of low-unit packs of Maggi in response to inflationary pressures without increasing prices, according to distributors.
The cautious commentary and indirect pricing action comes alongside a strong quarterly performance. Nestle India’s revenue from operations rose 25.1% year-on-year to Rs 6,378 crore in the June quarter (Q1FY27), while standalone net profit climbed 47.9% to Rs 975 crore and Ebitda margins expanded 250 basis points to 24.1% in Q1 versus 21.6% reported last year. One basis point is one-hundredth of a percentage point.
But analysts have warned that the macro-economic risks come at a time when consumer demand remains sensitive to prices. For Nestle India, a prolonged geopolitical disruption and monsoon-led concerns could affect supplies, increase operating costs and weaken consumption at the same time.
Nestle India shares fell as much as 4% intra-day on Tuesday to close down 1.65% on the BSE at Rs 1,492 apiece, as investors assessed the outlook presented by the company.
Tiwary said the company’s distribution network has grown nearly fourfold since 2021, enabling it to reach about 219,700 villages and 6.2 million outlets as of the end of March 2026. That helped Nestle record its highest-ever expansion in outlet reach across its peer group.
He also said Nestle continued to prioritise volume-led growth, adding that brands such as KitKat, Maggi, Nescafe and Munch still have significant headroom for expansion in India. Tiwary also highlighted newer businesses, saying breakfast cereals have been a strong addition to the portfolio and Nespresso stores and coffee machines have a long runway for growth.