Nestle India Q2 Results: Net Profit Down 24%, Revenue Hits Rs 5,644 Crore

Nestle India reported its Q2FY26 earnings, posting a 23.6% decline in standalone net profit to Rs 753.2 crore. Despite the drop, revenue rose 10.6% YoY to Rs 5,643.6 crore, reflecting strong domestic demand and broad-based volume growth across product categories.

Market Performance

Following the earnings announcement, Nestle India’s stock responded positively:

• Stock jump: Over 3.3%
• Trading price: Rs 1,262 on NSE (early afternoon session)

The market reaction highlights investor confidence in the company’s robust domestic performance despite rising input costs impacting margins.

Main News: Q2 Financial Highlights

Nestle India’s quarterly performance was shaped by several key factors:

• Standalone Net Profit: Rs 753.2 crore (down 23.6% YoY)
• Revenue from Operations: Rs 5,643.6 crore (up 10.6% YoY)
• Consolidated Net Profit: Rs 743 crore (down 17% YoY)
• Consolidated Revenue: Rs 5,645 crore (up 10% YoY)
• EPS: Rs 3.90 vs Rs 3.88 last year (after excluding prior-year exceptional gain of Rs 290.8 crore)

The profit decline was mainly due to higher input costs, particularly cocoa and milk, along with rising operating expenses amid the ongoing festive season.

Domestic Growth at Record High

Domestic sales hit an all-time high of Rs 5,411 crore, growing 10.8% YoY, driven by volume-led growth across most product segments.

• Three out of four product groups delivered strong double-digit growth.
• GST amendments are expected to boost consumption and affordability across categories.

Notably, the pet food business posted high double-digit growth, marking its highest turnover since integration following the acquisition of Purina Petcare India in 2022. A minority stake in Drools was also acquired in May, strengthening Nestle’s footprint in the pet care segment.

Segment Performance

Nestle India reported strong growth across key segments:

• Confectionery: KITKAT remained the largest growth driver, with MUNCH and MILKYBAR also posting high double-digit growth. Rural distribution expansion supported market share gains.
• Powdered & Liquid Beverages: NESCAFÉ led coffee category growth, improving household penetration and market share.
• Prepared Dishes & Cooking Aids: Volumes accelerated, contributing to double-digit growth.
• Milk Products & Nutrition: Showed mixed trends, impacted by rising input costs.

Profitability and Financials

Nestle India’s EBITDA stood at 22% of sales in Q2FY26, reflecting controlled operating efficiency. Despite a drop in net profit, EPS remained stable at Rs 3.90.

The absence of prior-year exceptional gains explains the YoY decline, highlighting the impact of one-time divestitures on profitability.

Commodity Outlook

Input costs shaped earnings during the quarter:

• Milk prices: Expected to soften post-festive season with the flush season
• Coffee prices: Likely to ease with normal crop expectations in Vietnam and India
• Cocoa: Supply-demand expected to balance after recent corrections
• Edible oils: Prices may remain firm amid tight global supply

Summary

Nestle India’s Q2FY26 results reflect a company navigating rising input costs while continuing to deliver strong domestic growth.

Revenue and domestic sales growth signal robust consumer demand, while segment performance across confectionery, beverages, prepared dishes, and pet food showcases the company’s broad-based expansion.

With stable EBITDA margins, record domestic volumes, and a growing pet food business, Nestle India maintains a strong operational footing despite the YoY profit dip.