Nestle India Reports Marginal Decline in Q2 Net Profit amid Commodity Inflation

Nestle India has reported its financial results for the second quarter of fiscal year 2025, showing a slight dip in net profit. The company’s net profit stood at Rs 899 crore, a marginal decline from Rs 908 crore recorded in the same quarter of the previous year. This result comes amid a challenging economic environment characterized by high commodity prices and muted consumer demand.

The revenue from operations for the period increased to Rs 5,104 crore, reflecting a 1.3 percent rise from Rs 5,037 crore a year earlier. Despite the revenue increase, the company’s performance was below the expectations set by market analysts. According to a Moneycontrol poll comprising seven brokerages, the company’s revenue was anticipated to be around Rs 5,336 crore, with profits expected to fall to Rs 888 crore.

Suresh Narayanan, Chairman and Managing Director of Nestlé India, commented on these results, stating, “Despite a challenging external environment with muted consumer demand and high commodity prices, especially for coffee and cocoa, we remained resilient in our pursuit to deliver growth. This quarter, five of our top 12 brands grew at double-digit rates.” He added that 65% of the top 12 brands, including MAGGI noodles, have seen positive volume growth over the past nine months.

Meanwhile, the company’s Swiss parent announced a revamp in senior leadership and operating structure, along with a cut in its full-year sales outlook due to continued price hikes. The Swiss company reported a lower-than-expected nine-month organic sales growth.

Nestle India’s performance in different segments varied. The beverages business, including NESCAFÉ brands, posted high double-digit growth attributed to category recruitment and premiumization. The e-commerce segment also delivered significant growth with a 38% rise, contributing 8.3% to domestic sales.

Commodity prices remain elevated, particularly for coffee and cocoa. There is also an increase in cereal and edible oil prices due to recent global developments, although milk and packaging prices have largely stabilized.

On October 17, Nestle India’s shares were trading 1.8% lower at Rs 2,418.1 apiece on the stock exchange. The company’s efforts in expanding its export footprint continue, with new products being introduced in markets such as Canada, the Middle East, Maldives, and Papua New Guinea.