- Nestle India reported Q4 net profit of Rs 1,114 crore with 22.6% revenue growth
- CEO Manish Tiwary emphasised volume-led growth with possible price-led adjustments
- West Asia crisis raised operational costs like packaging, utilities, palm kernel oil
Nestle delivered solid fourth quarter earnings, with a substantial beat on all profits, with net profit reaching Rs 1,114 crore while revenue surged 22.6%. But even amid this growth, the emerging narrative from the company's leadership is a cautious pivot in growth strategy.
Speaking to NDTV Profit's Tamanna Inamdar, Nestle's Managing Director and CEO Manish Tiwary stressed on the company's strategy to spear ahead with volume-led growth, while pointing to a potential re-evaluation of the pricing mix.
"Our intention is still to grow volumes," Tiwary clarified, but noted that there could be some price-led growth "because of the pressures and the uncertainty in the market".
The primary driver behind this shift is the ongoing uncertainty stemming from the West Asia crisis, which has begun to impact operational costs beyond raw materials.
Tiwary noted that while some commodities like coffee and cocoa have seen softening from record highs, other essentials are hardening.
"We saw some softening on cocoa and coffee, and then we saw some hardening on milk and wheat. What's added to some of these challenges is the West Asia situation—because of that, packaging material, utilities, these are going up faster. And of course, palm kernel oil is going up," he said.
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For a company that has historically relied on stable pricing to maintain penetration rate, particularly in categories like noodles where urban monthly penetration is just 25%, the shifting mix marks a significant departure. Nestle itself had entered the year expecting a pure volume-led trajectory, but that has changed.
While the company has not yet effected price hikes in the current quarter, he confirmed that they are becoming "watchful" as they monitor the daily impact of fuel prices and regional tensions on consumer sentiment.
The company reported that the last financial year was one of its best for cost savings, which allowed margins to stay intact at 26.3% despite a 52% increase in advertising and promotion investments.
Furthermore, the company is leveraging high-growth channels like Quick Commerce, where it maintains a 95% fill rate across over 5,500 dark stores, to sustain demand for new premium ranges.
However, Tiwary was clear that the Q4 beat, which saw double-digit volume growth across all segments, will face a stricter test as the geopolitical crisis persists into FY27.
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