Nestlé Not Brewing Enough Growth as Costs, Demand Pinch

Nestlé India Ltd could be a beneficiary of the much-awaited boost to urban consumption from the budget as and when it starts to trickle in. The company derives around 75% of its sales from the urban market.

- Pallavi Pengonda

In a recent meeting with analysts, the management displayed confidence about the long-term prospects given the industry's compelling growth opportunity led by relatively low per capita packaged foods consumption.

But there are near-term challenges. Like many peers, Nestlé too is facing the wrath of dull demand, marked by moderating urban consumption and comparatively faster rural growth. High food inflation is also hurting growth.

The pressure is evident. Nestlé's year-on-year domestic volume and sales growth were flat and at 3%, respectively, for the nine-month ended December (9MFY25). Sales growth was led by price hikes.