Nestle India Q1 Results: Profit Slips 5% Amid Cost Pressures

Nestle India reported a 5 per cent year-on-year decline in net profit for the quarter ended March 2025, with rising raw material costs continuing to impact the company’s margins. Net profit for the January–March period stood at Rs 885.4 crore, aligning closely with market expectations.

Despite pressure on earnings, the FMCG major saw signs of improving consumer sentiment, with volumes growing by 2 per cent during the quarter. Revenue from operations rose 4.5 per cent to Rs 5,503.8 crore, compared to Rs 5,268 crore in the same period a year earlier.

Domestic sales reached an all-time high of Rs 5,235 crore, up 4.2 per cent year-on-year, while total sales increased by 3.7 per cent. Nestle India Chairman and Managing Director Suresh Narayanan credited the performance to a rebound in volumes, especially within the food and beverage categories. He noted that this uptick reflects improving consumer sentiment across urban markets.

Among product segments, the Powdered and Liquid Beverages category saw high double-digit growth, led by increased penetration of NESCAFE. The Confectionery division, driven by Kit Kat, posted high single-digit gains, while Prepared Dishes and Cooking Aids, which includes Maggi, recorded mid-single-digit growth and a return to volume expansion.

Also Read: Hindustan Unilever Reports Dip in Q4 Profit; Declares Rs 24 Dividend

Tough Economic Climate

Volume growth is a strong indicator of consumer resilience in a tough economic climate, Narayanan said. He highlighted that strategic investments in innovation and distribution have helped the company grow its market share across segments.

However, elevated input costs continued to weigh on profitability. The company highlighted ongoing price pressures in key commodities such as coffee and cocoa, although cocoa prices have begun to ease slightly. Milk prices rose seasonally with the onset of summer, while edible oil costs remained relatively stable.

Nestle India’s board has recommended a final dividend of Rs 10 per share for FY25. The record date for this payout is set for July 4, with distribution beginning July 24, pending shareholder approval. This follows interim dividends paid earlier in the year, reflecting the company’s continued focus on delivering value to shareholders despite a challenging cost environment.

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