Nestlé India has announced its financial results for the second quarter of the fiscal year 2024-25, reporting a net profit of ₹986 crore on October 17, 2024. This marks an 8.6% increase from the previous year’s profit of ₹905 crore. The company’s revenue for the quarter rose modestly by 1.3%, reaching ₹5,104 crore, compared to ₹5,036 crore in the same period last year. However, this growth was below market expectations, which had projected revenues of around ₹5,357 crore.
Nestlé India’s performance in Q2 FY25 reflects a mixed outcome amid challenging market conditions. The Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) stood at ₹1,168 crore, translating to an EBITDA margin of 22.9%, down from expectations of 24.2%. The decline in margins is attributed to rising commodity costs, particularly for coffee and cocoa, which have impacted profitability.
Main Points
Key Highlights
- Net Profit: ₹986 crore (up 8.6% YoY)
- Revenue: ₹5,104 crore (up 1.3% YoY)
- EBITDA: ₹1,168 crore
- EBITDA Margin: 22.9%
Suresh Narayanan, Chairman and Managing Director of Nestlé India, acknowledged the pressures from softer consumer demand and high commodity prices but expressed confidence in the company’s resilience. He noted that five out of their top twelve brands achieved double-digit growth during this quarter. Despite these challenges, Narayanan highlighted that 65% of their top brands, including MAGGI noodles, have shown positive volume growth over the past nine months.
Sales Breakdown
In terms of sales distribution:
- Domestic sales increased by 1.23% to ₹4,883 crore.
- Export sales grew by 3.13% to ₹191 crore.
The company has also seen significant growth in its e-commerce segment, which contributed to 8.3% of domestic sales and marked the highest growth rate in seven quarters.
Stock Market Reaction
Following the announcement of its Q2 results, shares of Nestlé India experienced a decline. The stock fell by approximately 4%, trading at around ₹2,376 on the Bombay Stock Exchange (BSE). Analysts suggest that investor sentiment was affected by the company’s lower-than-expected revenue and margin figures.
Future Outlook
Looking ahead, Nestlé India plans to continue its focus on innovation and product development to drive growth. The company has introduced over 145 new products in recent years and aims to enhance its portfolio further with new launches expected soon.
In addition to product innovation, Nestlé is also adapting its marketing strategies to better connect with consumers amid changing market dynamics. The company is leveraging digital channels and festive promotions to boost sales during peak seasons.
Management Changes
Nestlé India has announced that Manish Tiwary will succeed Suresh Narayanan as Managing Director starting August 1, 2025. Tiwary brings extensive experience from his previous role as Country Manager for Amazon India and his long tenure at Unilever.
