Competitive pressures, valuations leave little room for upside in Nestle India

Nestle India saw subdued revenue growth of 4.5 percent on-year during the fourth quarter of the financial year 2024-25 (FY25), on a high base of 9 percent and 100 basis points gross margin contraction due to inflationary pressures in coffee, edible oil and palm oil.

- DEVANGSHU DATTA

There was double-digit growth in the beverages and confectionery categories, due to price hikes. But growth was muted in the prepared dishes and milk nutrition segments.

Nestle has appointed Manish Tiwary as managing director for a five-year term starting April 1, 2025. This may lead to a shift in the strategy which is monitorable.

Nestle's total revenue rose 4.5 per cent year-on-year (Y-o-Y) to ₹5,500 crore. Domestic sales saw 4.2 per cent Y-o-Y growth to ₹5,230 crore. Exports saw 9 per cent decline Y-o-Y to ₹210 crore with coffee exports taking a hit.

The operating profit margin expanded marginally by 10 basis points Y-o-Y to 25.6 per cent (23.4 per cent in Q3FY25). Operating profit grew by 5 per cent Y-o-Y to ₹1,410 crore while adjusted net profit declined 4.5 per cent Y-o-Y to ₹870 crore.