Synopsis
Nestle India received a warning from SEBI for insider trading violations. The company stated that the breach does not materially affect its operations. Despite the warning, Nestle's stock rose, and the company reported a profit increase in Q3 FY25.Key Takeaways
- SEBI issued a warning to Nestle India for insider trading violations.
- The violation involved a 'contra trade' by a designated person.
- Nestle India confirmed no material impact on business operations.
- Despite the warning, Nestle's stock price increased.
- The company reported a 5% profit increase in Q3 FY25.
Mumbai, March 7 (NationPress) The Securities and Exchange Board of India (SEBI) has issued a formal warning to Nestle India, a leader in the FMCG sector, for breaching insider trading laws, as announced by the company on Friday.
The warning, which was communicated by SEBI's Deputy General Manager, was directed to the company’s Compliance Officer (CCO).
Nestle India reported in a stock exchange notification that it received the SEBI letter on March 6, 2025.
The breach was attributed to a designated individual within the organization. Nevertheless, the coffee and tea producer affirmed that this incident does not materially affect its financial, operational, or other business functions.
As per SEBI, the infraction involved a “contra trade”, which transpires when an insider trades shares within a six-month window of a prior transaction in the same security, aiming for short-term gains.
SEBI regulations explicitly forbid such trades for insiders and their close relatives to avert the exploitation of non-public price-sensitive information. The six-month restriction period begins from the date of the initial transaction.
In spite of the warning, Nestle India’s stock showed resilience in the market. On Friday, the stock increased by over 2 percent to Rs 2,245.80 on the Bombay Stock Exchange (BSE) before retracting some of its gains.
Additionally, the FMCG firm recorded a 5 percent rise in its consolidated net profit, reaching Rs 688 crore in Q3 of the current financial year (FY25), compared to Rs 655 crore in the same period last fiscal (Q3 FY24).
According to its exchange filing on January 31, the primary driver of this profit surge was increased sales of its powdered and liquid beverages, particularly the well-known Nescafe coffee brand.
Its total operational revenue for the quarter amounted to Rs 4,779 crore, reflecting a 4 percent increase from Rs 4,600 crore in the equivalent quarter of the previous year (Q3 FY24).
Nestle India, a subsidiary of the Swiss multinational Nestle S.A., is renowned for its popular brands such as Nescafe, Maggi, and KitKat. The company is involved in the manufacturing and marketing of a diverse array of food and beverage products.
