Nestle India Share Price in Focus: Q2 FY 2025 Results Announced

Nestle India reported a 1.5% decline in domestic volumes for the second quarter of FY25, reflecting the impact of softer consumer demand across key segments. This figure aligns with expectations, as analysts had predicted volume growth from 1% to 2%. Despite this decline, Nestle India’s net profit for the quarter, covering the period from July to September 2024, reached ₹986 crore, surpassing market estimates of ₹877 crore and representing an 8.5% year-on-year increase.

However, revenue for the quarter grew modestly by 1% to ₹5,104 crore, falling short of projections which had pegged it at ₹5,357 crore. The company faced significant pressure on its margins, with EBITDA coming in at ₹1,168 crore, a 9.7% decline compared to market estimates of ₹1,293.7 crore. Nestle India’s EBITDA margin contracted by 130 basis points to 22.9%, below expectations of 24.2%.

The company cited several challenges during the quarter, including elevated commodity prices, particularly for coffee and cocoa, and muted consumer demand. Despite these hurdles, Nestle India reported that five of its top 12 brands achieved double-digit growth. Additionally, 65% of its top brands, including the popular Maggi noodles, demonstrated positive volume growth over the last nine months.

Nestle’s e-commerce business delivered high double-digit growth, marking its strongest performance in the last seven quarters and contributing to 8.3% of domestic sales. The company’s Out-of-Home (OOH) segment continued to show robust double-digit growth, driven by product diversification, premiumisation, and expanding its reach beyond metro areas.

Looking ahead, the company anticipates continued pressure on margins due to sustained high commodity prices, particularly in key inputs like cereals and edible oils. However, milk and packaging costs have remained relatively stable. 

Nestle India Share Price Performance

On October 17, 2024, Nestle India’s share price was trading at ₹2,373.00 as of 12:50 PM, marking a decline of 3.79%. The stock faced downward pressure due to disappointing volume growth and margin contraction following the announcement of its Q2 results, reflecting investor concerns over the company’s performance.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.