- Nestle India expects 33.8% YoY profit growth to ₹1,008 crore in Q2FY27
- Revenue projected to rise 19.7% YoY to ₹6,758 crore driven by volume and pricing
- Volume growth forecasted between 12% and 15% YoY, led by confectionery and beverages
FMCG major Nestle India Ltd. is expected to deliver a robust financial performance for the second quarter ended September 30 (Q2FY27), propelled by double-digit volume expansion, premiumisation trends, and rapid traction across quick-commerce channels.
According to consensus estimates, the packaged foods manufacturer is likely to report a standalone net profit (PAT) of ₹1,008 crore, marking a 33.8% year-on-year increase compared to the corresponding period of the previous fiscal.
Revenue from operations is projected to rise 19.7% YoY to ₹6,758 crore, up from approximately ₹5,645 crore in the year-ago quarter, supported by a healthy mix of volume growth and calibrated pricing interventions.
What to Expect: Volume Expansion and Channel Momentum
Volume-Led Growth: Underlying volume growth is pegged at a strong 12% to 15% YoY, underpinned by sustained urban demand and expanding portfolio premiumisation.
Category Drivers: Confectionery and beverages are anticipated to spearhead overall category growth, bolstered by deeper distribution penetration and swift consumer adoption via quick-commerce platforms.
Balanced Market Mix: Domestic business momentum is expected to remain balanced across pricing actions and volume upticks, while the international export business is slated to maintain steady performance.
Key Monitorables & Commentary to Watch
Rural vs. Urban Trajectory: Investors will look for management commentary on broad-based rural recovery versus urban discretionary demand patterns.
Commodity Headwinds: Directional commentary on key raw material inputs, particularly elevated coffee and cocoa prices, will remain in focus.
Operating Margins & Fuel Costs: With EBITDA margins expected to contract by roughly 90 basis points to 23.3%, guidance on freight, packaging, and fuel inflation management will be closely monitored.
Competitive Landscape: Category-level competitive dynamics, promotional intensity, and market-share trends against regional and unorganised players.
Nomura
We expect NEST to sustain its strong growth momentum and report healthy
volume + mix growth of 17% y-y, leading to overall sales growth of c.23% y-y,
before it starts cycling a high base from 3Q onwards.
○
While we expect GPM to contract sequentially due to input cost inflation, however,
we believe operating leverage should help maintain OPM on a q-q basis, leading
to strong 35% y-y EBITDA growth.
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However, given the rich valuations vs peers, we expect the share price to remain
rangebound
DAM Capital
%. Nestlé is expected to
grow ~16.1% despite a demanding base; gross margins should be flat YoY, though commodity inflation is likely to
compress margins by ~311 bps QoQ.
We estimate ~16.1% YoY revenue growth, driven by broad-based volume growth despite a
firmer base, as the company did not witness any GST-transition disruption last year.
Confectionery and Beverages are likely to lead, supported by higher ad-spends,
premiumisation and quick commerce.
Gross margin is expected to remain largely stable YoY, as inflation in cocoa, sugar, edible
oils and dairy proteins is offset by softer coffee prices. EBITDA margin is estimated at
~21.9%, flat YoY, with cost savings funding higher ad-spends.
Investec
> We build ~19% YoY revenue growth led by ~13%
volume growth
> Gross margin is expected to expand by ~130 bps
YoY owing to mix, RM stability
> EBITDA margin is expected to expand ~10 bps
YoY, partly impacted by higher opex/ ad spends
HSBC
Nestle India's strong growth momentum could sustain in Q2FY27 with c21% yoy revenue
growth (2-yr CAGR of 15.7%; Q1FY27: 15.1%). Gross margins could continue to improve
yoy but be slightly lower qoq as raw material prices have spiked. The company's
Chocolates business likely – yet again – outperformed. The core Milk Nutrition business
recovery is part of the growth acceleration seen and we expect base to remain benign in
H1FY27. Overall, we expect EBITDA at cINR16.3bn (up 32% YoY, 2-yr CAGR: +17-18%,
again similar to Q1FY27), implying margins of 23.9%.
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