– The company recorded a revenue (up 1.3% YoY / up 6% QoQ), missing street estimates, due to muted consumer demand.
– The company earned an EBITDA (down 4.7% YoY / up 4.8% QoQ), in line with street estimates, due to higher advertising cost and high commodity prices especially for coffee and cocoa. The EBITDA margin for the company stood at 22.9% (down 130bps YoY / down 30bps QoQ).
– The company’s PAT stood (down 0.9% YoY / up 20.5% QoQ), in line with street estimates. The PAT margin was 17.6% (down 41bps YoY / up 211bps QoQ) in Q2FY25.
– Domestic sales grew by 1.2%, while export sales increased by 3.1%, driven by geographical expansion beyond metros into Tier-1 towns. The company continued to broaden its footprint by introducing new SKUs across categories in Canada, the Middle East, the Maldives, and Papua New Guinea. E-commerce also saw strong growth, up 38%, supported by premiumization, new user acquisition, festive participation, and targeted digital communications. E-commerce now contributes 8.3% to domestic sales during the quarter.
– In the current quarter, Nestle India increased its marketing investments, focusing on media efficiencies and digital capabilities. The company launched refined-sugar-free CERELAC variants, expanding the range to 21, with 14 sugar-free options. These efforts, alongside continuous innovation, have reinforced Nestle’s leadership and growth in key product categories.
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Nestle India has demonstrated resilience in the face of challenges such as muted consumer demand and high commodity prices, delivering stable growth in Q2FY25. Despite pressures, the company’s strategic focus on innovation, marketing investments, and premiumization across its product portfolio has yielded strong performance. Categories like beverages, particularly NESCAFE, and milk products and nutrition, including MILKMAID, recorded high double-digit growth. MAGGI noodles, alongside new product launches such as CERELAC variants with no refined sugar, demonstrate Nestle’s continued innovation drive. Additionally, e-commerce and out-of-home businesses showed strong growth, highlighting the company’s expanding digital and retail presence. However, commodity prices, especially for coffee and cocoa, remain elevated, putting pressure on margins. Nestle’s forward-looking initiatives, including its push into premium products and sustainability efforts, such as the use of biomass boilers in major factories, will likely support its continued growth. Moving forward, recovery in rural demand, as well as the success of new product lines and distribution channels, will be key indicators to watch. With these strategies in place, Nestle India is positioned to sustain growth and deepen consumer engagement through innovation and expanding market reach.
