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Nestlé India Q1 FY27 Profit Jumps 47.9% Amidst Cost Pressures

By Business DeskNestlé India Q1 FY27 Profit Jumps 47.9% Amidst Cost Pressures

Nestlé India’s Q1 FY27 net profit surged 47.9% to ₹975 crore, defying commodity cost pressures with broad-based growth across all product categories and channels.

Nestlé India has demonstrated a robust financial performance for Q1 FY27, with standalone net profit surging by 47.9% year-on-year to ₹975 crore. This significant growth was broad-based, driven by strong double-digit increases across all four product groups and sales channels, including quick commerce. Rural markets proved a key momentum driver, expanded distribution points bolstering reach.

Key Financial Highlights

  • Standalone net profit: ₹975 crore (up 47.9% YoY)
  • Revenue from operations: ₹6,378 crore (up 25.1%)
  • Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA): ₹1,538 crore (up 39.8%)
  • EBITDA margin: 24.2% (expanded from 21.6% in the prior year)

The company’s product categories contributed significantly to this success, with consistent performance across its portfolio. Powdered and liquid beverages, notably Nescafe Classic, Sunrise, and Nescafe Gold, marked their 20th consecutive quarter of double-digit growth. The confectionery business, featuring KitKat and Munch, also delivered volume-led double-digit growth, boosted by premiumization and e-commerce.

Segmental Growth Drivers

  • Powdered and liquid beverages (Nescafe Classic, Sunrise, Nescafe Gold) maintained 20 consecutive quarters of double-digit growth.
  • Confectionery (KitKat, Munch) saw volume-led double-digit growth, boosted by premiumization and e-commerce.
  • Prepared Dishes and Cooking Aids (Maggi) gained market share and penetration.
  • Pet food business reported strong double-digit growth and new product introductions.

Despite the strong earnings, Nestlé India highlighted persistent challenges from elevated raw material costs and weather-related supply risks, particularly due to El Niño. Cocoa prices faced impact from erratic rainfall, while sugar prices increased due to lower crop estimates. Edible oil prices remain high, and the protein complex faces inflationary pressures.

Analysts anticipate the company might opt for ‘shrinkflation’ rather than direct price hikes to manage these rising costs. However, some analysts expect other staples companies to also report strong Q1 and Q2 figures, with limited El Niño impact foreseen for the latter half of FY27, suggesting a cautious but stable outlook.

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