Nestlé India reported its Q1 FY26 results on July 24, with net profit and EBITDA falling short of market expectations despite a steady growth in revenue.
The company posted a net profit of ₹646.6 crore, marking a 13.4% year-on-year growth from ₹570 crore in Q1 FY25. However, this was well below CNBC-TV18’s poll estimate of ₹732 crore. The figure also represented a quarter-on-quarter decline from ₹873.4 crore in the March quarter.
Revenue from operations stood at ₹5,096.1 crore, up 6% YoY from ₹4,813.9 crore, marginally ahead of expectations of ₹5,080 crore. Sequentially, revenue was lower than the ₹5,503.8 crore reported in Q4 FY25.
EBITDA came in at ₹1,100 crore, lower than the expected ₹1,135 crore, and down from ₹1,135 crore YoY. The EBITDA margin dropped 70 basis points YoY to 21.60%, falling short of the expected 23.02%.
Segment-wise performance
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Domestic sales: ₹4,860 crore vs ₹4,608.5 crore YoY (but down QoQ from ₹5,234.9 crore)
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Export sales: ₹213.9 crore, nearly flat YoY
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Sale of products: ₹5,073.9 crore vs ₹4,792.9 crore YoY
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Other operating revenue: ₹22 crore
Expenses and profitability
Total expenses rose to ₹4,112.3 crore from ₹3,884.1 crore in Q1 FY25. Key expense highlights:
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Cost of materials consumed: ₹2,153.2 crore vs ₹1,943.2 crore YoY
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Employee benefit expense: ₹515.6 crore vs ₹505.4 crore YoY
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Finance cost: ₹46.9 crore vs ₹31.6 crore YoY
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Depreciation & amortisation: ₹156.9 crore
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Other expenses: ₹1,176.9 crore
Profit before tax (PBT) stood at ₹887.8 crore. After accounting for taxes of ₹241.4 crore (₹234.8 crore current and ₹6.6 crore deferred), net profit settled at ₹646.6 crore, well below analyst estimates.
Management commentary and outlook
Outgoing CMD Suresh Narayanan noted strong double-digit growth in core brands including Maggi, KitKat, Nescafé, Munch, and Milkybar. The Pet Food and Out-of-Home segments also posted significant traction.
The e-commerce channel contributed 12.5% of domestic sales, driven by rapid expansion in Quick Commerce, especially in urban areas.
On input costs, Nestlé expects stable prices for coffee, cocoa, and edible oils, while milk prices may soften due to a favourable monsoon.
This quarter marks the last earnings presentation under Suresh Narayanan, who will step down on July 31. Manish Tiwary, former senior executive at Amazon, will assume the role of CMD from August 1, 2025.
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