Food major Nestle India‘s June quarter profit, revenue and operating margins beat street estimates, as demand for packaged food and beverages, including Munch chocolates, Maggi noodles and Nescafe remained robust. The performance came against an uncertain geopolitical backdrop, driven by broad-based volume growth and premiumisation.
The Gurgaon-headquartered company posted a nearly 48% year-on-year increase in standalone net profit for Q1FY27 to Rs 975crore, ahead of Bloomberg consensus estimates of Rs 837 crore for the period.
Standalone revenue from operations grew 25.2% year-on-year to Rs 6,378 crore in Q1, ahead of the Rs 6,063 crore forecast by analysts for the period. Earnings before interest tax depreciation and amortisiation (Ebitda) rose nearly 40% year-on-year to Rs 1,538 crore, which compares favourably with Bloomberg consensus estimates of Rs 1,354 crore for the quarter. 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.
“We delivered a strong quarter, led by volume growth. We further accelerated operational cost savings, and continued to step up investments behind our brands, with a strong focus on execution,” Manish Tiwary, chairman and MD, Nestle India, said.
Broad-Based Volume Growth
The standalone performance was supported by strong double-digit sales growth across all four product groups. The company also saw high double-digit growth across trade channels, driven by an over 40% increase in advertising spends during the quarter. The company said that quick commerce had emerged as a key growth lever. At the same time, general trade, which forms the backbone of fast-moving consumer goods in India, saw double-digit growth across town classes, with rural markets leading the momentum, the firm said.
Shares of Nestle India closed trade at Rs 1,492.20 apiece on the BSE, up 2.7% versus the previous day’s close, even as the broader Sensex was down 0.92% at the end of trade.
Category Performance
Confectionery continued its momentum, the company said, aided by premiumisation and e-commerce, with KitKat gaining market share. The powdered and liquid beverages business, led by Nescafe, registered its 20th consecutive quarter of double-digit growth, driven by rising coffee consumption, premium products and wider distribution.
Prepared dishes and cooking aids, led by Maggi, recorded strong growth through urban engagement, rural expansion and product innovation, while the Milk Products and Nutrition business delivered broad-based volume growth across brands and channels, the firm said.
Looking ahead, Nestle India expects commodity trends to remain mixed. Coffee supply is likely to improve, supported by higher production in Brazil and Vietnam, although weather-related disruptions could create short-term volatility. Cocoa and sugar continue to face supply pressures, edible oil prices remain elevated, while dairy-based proteins continue to see inflationary pressure as demand outpaces supply. Wheat and milk prices, however, are expected to remain largely range-bound, the firm said.