Nestle India Profit Falls 12% as Input Costs Climb

Nestle India Ltd. reported a 12% year-on-year decline in net profit to ₹6.6 billion for the April–June quarter, marking its second consecutive quarterly drop, due to elevated raw material and operational costs.

Revenue from operations rose nearly 6% on year to ₹51 billion. Domestic sales stood at ₹48.6 billion, up over 5%, while exports grew 16% to ₹2.1 billion, led by strong demand for foods, coffee, instant tea, and breakfast cereals.

Total expenses increased over 9% to ₹42 billion, with input costs rising nearly 11% to ₹21.5 billion—the highest since the March quarter of 2022–23. Depreciation and amortisation costs rose 39% on year to ₹1.6 billion, while finance costs nearly doubled due to temporary borrowings to support cash flows.

Nestle reported an EBITDA margin of 21.7%. Shares declined over 5% to ₹2,328 on the National Stock Exchange following the results.

Outgoing CMD Suresh Narayanan said the quarter was impacted by high commodity prices and increased operational costs from recent capacity expansion. Manish Tiwary will assume charge as MD and CEO from August 1.

Segment performance:

• Prepared dishes and cooking aids: Reported volume growth, with double-digit sales growth in Maggi noodles. The segment contributed over 31% to overall revenue.
• Powdered and liquid beverages: Nescafe gained market share, led by cold coffee demand. Segment share stood at 14%.
• Confectionery: Continued double-digit growth, led by KitKat. Accounted for 17% of total revenue.
• Milk products and nutrition: Mixed performance but remained the largest revenue contributor at 38%.
• Breakfast cereals: Maintained strong double-digit growth.
• E-commerce: Contributed 12.5% of domestic sales, supported by new product launches and expansion in quick commerce.

Nestle expects prices of coffee, cocoa, and edible oil to remain range-bound, while milk prices may soften with a favourable monsoon and flush season.