Nestlé India Beats Street Estimates with Strong Volume Growth in Q2 FY26; Stock Jumps 4.5%
New Delhi: Nestlé India reported a robust volume-driven performance in Q2 FY26 (July–September), surpassing market expectations and lifting its stock by around 4.5% on Thursday’s close. While net profit appeared lower due to a high base, underlying growth indicators remained strong.
Consolidated revenue from operations rose 10.6% year-on-year to ₹5,643.6 crore, supported by record domestic sales of ₹5,411 crore—a 10.8% increase—driven by double-digit growth in three out of four product categories.
EBITDA stood at approximately ₹1,236.6 crore, accounting for 22.0% of sales, underscoring operating resilience amid raw material cost pressures.
Consolidated PAT came in at ₹743.2 crore, while standalone PAT was ₹753.2 crore with an EPS of ₹3.90. The year-on-year dip in profit was primarily due to the absence of last year’s exceptional income of ₹290.8 crore, rather than a decline in operating performance.
Broad-Based Growth Across Categories
The quarter’s momentum was driven by strong volumes, an improved product mix, and efficient execution across modern trade, quick commerce, and out-of-home channels.
Sales of Products stood at ₹5,630.2 crore (up 10.9% YoY), while exports also delivered a solid double-digit rise.
Confectionery led the growth, powered by KitKat, alongside strong gains from Munch and Milkybar, supported by deeper rural reach.
Powdered & Liquid Beverages maintained momentum, with Nescafé products expanding penetration and premium variants like Nescafé Gold and Roastery driving upgrades.
Prepared Dishes & Cooking Aids saw Maggi Noodles post double-digit growth, buoyed by product innovations such as Double Masala and Spicy range, while Masala-e-Magic extended household reach.
Milk Products & Nutrition showed gradual improvement, and the Pet Food segment achieved its highest-ever turnover, with high double-digit growth.
Margins and Financials Remain Strong
Despite slightly higher raw material intensity, Nestlé sustained healthy margins through scale efficiencies and cost discipline.
Depreciation and finance costs were steady, and working capital remained tightly managed—helping sustain strong cash flows and liquidity.
The company’s balance sheet showed rising cash reserves and continued investment in brands and capacity expansion.
Market Reaction and Outlook
Brokerages highlighted the core operating beat, record domestic sales, and 22% EBITDA margin as key positives, driving investor confidence. Shares ended up 4.5–5%, touching new highs.
Looking ahead, management expects milk prices to ease post-festive season, coffee prices to stabilise as crop conditions improve in Vietnam and India, and cocoa supply to normalise after two years of tightness. However, edible oil prices may remain firm globally.
Nestlé reaffirmed plans to step up brand and capacity investments, including a new Maggi Noodles line at Sanand, as it continues to pursue penetration-led growth across markets.
Key Financial Highlights (₹ crore):
Revenue from operations (consolidated): 5,643.6
Sales of Products (standalone): 5,630.2
Domestic sales: 5,411.0
EBITDA: ~1,236.6 (22.0% of sales)
PAT (consolidated): 743.2
PAT (standalone): 753.2
EPS (standalone): 3.90
Exceptional income (Q2 FY25): 290.8 (credit)
