Why Did Nestle India's Q1 Net Profit Drop by 13.4% to Rs 646.5 Crore?
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Synopsis
Nestle India's financial report reveals a 13.4% drop in net profit for Q1 FY26, while revenue shows promising growth. Amidst rising commodity costs, the company remains optimistic about stabilizing prices and strong performance in its beverage segment, particularly Nescafe.
Key Takeaways
- Nestle India reported a 13.4% decline in net profit for Q1 FY26.
- Revenue grew by 6% to Rs 5,096 crore.
- Domestic sales increased by 5.5%.
- Export sales grew by 16% YoY.
- The Powdered and Liquid Beverages segment showed strong growth.
Mumbai, July 24 (NationPress) The prominent FMCG player Nestle India announced a year-on-year (YoY) decline of 13.4 percent in its consolidated net profit, which decreased to Rs 646.5 crore for the first quarter of the ongoing financial year (Q1 FY26), down from Rs 746.6 crore in the same quarter last year (Q1 FY25).
Despite the profit drop, the FMCG giant achieved a 6 percent YoY increase in its revenue from operations, as reported in its filing with the stock exchange.
Revenue surged to Rs 5,096 crore for the April-June 2025 quarter, compared to Rs 4,814 crore in the corresponding period of the previous year.
This revenue growth was primarily driven by a 5.5 percent rise in domestic sales, which climbed to Rs 4,860 crore from Rs 4,608 crore.
Export sales also showed robust performance, increasing 16 percent YoY to Rs 214 crore from Rs 184.5 crore, as per the company's filing.
The total income for the quarter was reported at Rs 5,100 crore, marking a 5 percent increase from Rs 4,853 crore in the same period last year.
Product sales rose to Rs 5,074 crore, up from Rs 4,793 crore in the previous year’s quarter.
Other operating income saw a slight rise to Rs 22 crore, compared to Rs 21 crore the previous year.
Suresh Narayanan, Chairman and Managing Director of Nestle India, stated that the quarter faced challenges due to high commodity prices and increased operational expenses from recent manufacturing expansions.
He also indicated that borrowing from banks for short-term operational needs contributed to higher financing costs.
However, he expressed optimism, noting that prices for edible oil and cocoa have begun to stabilize, coffee prices are declining, and milk prices are experiencing a modest uptick.
Narayanan emphasized that the Powdered and Liquid Beverages segment remained a key growth driver, delivering robust double-digit growth.
“Nescafe maintained its leadership in the coffee market, gaining additional market share. The brand has focused on both affordable coffee offerings and premium products such as Nescafe Gold and Nescafe Roastery,” he added.
Point of View
It's crucial to approach Nestle India's recent financial results with a balanced perspective. While the decline in net profit raises concerns, the growth in revenue highlights the company's resilience and potential for recovery. The FMCG sector is facing challenges, but with strategic adaptations, Nestle India can navigate these hurdles effectively.
NationPress
30/10/2025
Frequently Asked Questions
What caused Nestle India's profit decline?
The decline in profit was primarily due to high commodity prices and increased operational costs resulting from recent manufacturing expansions.
How much did Nestle India's revenue grow?
Nestle India reported a 6 percent year-on-year growth in revenue, reaching Rs 5,096 crore for Q1 FY26.
What are the future expectations for Nestle India's pricing?
Chairman Suresh Narayanan indicated that prices for edible oil and cocoa have started to stabilize, while coffee prices are falling.
