Nestle India Q1 FY27 Results (NSE: NESTLEIND)
Signal: Margin expansion
The read
Strong volume-led revenue growth of 25.2% YoY, with gross margin expanding 200bps on input cost tailwind and EBITDA margin up 251bps to 24.1% despite a 40%+ surge in advertising spends. This is the second consecutive quarter of YoY margin expansion after Q4FY26's 100bps expansion. PAT grew 48.3% YoY, aided by operating leverage and lower finance costs. The standalone EPS of ₹5.06 is slightly higher than consolidated ₹4.97 due to associate loss of ₹164.4 M. The quarter's performance reinforces Nestlé India's pricing power and execution strength.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹6,378.18 Cr | 25.2% | -5.5% |
| EBIT | ₹1,350.33 Cr | 43.2% | |
| Net profit | ₹958.68 Cr | 48.3% | |
| EPS | ₹4.97 | 48.4% | |
| EBIT margin | 24.1% |
P&L walk
Revenue grew 25.2% YoY, driven by volume-led growth across all product groups. Gross margin expanded 200bps YoY as raw material cost % of sales fell from 45.0% to 42.9% (input cost tailwind). EBITDA margin expanded 251bps to 24.1% despite a 40%+ increase in advertising spends, reflecting operating leverage and cost savings. PAT grew 48.3% YoY, aided by lower finance costs and higher other income. EPS at ₹4.97 (+48.4% YoY) tracked PAT.
Key positives
- Revenue growth of 25.2% YoY, volume-led across all product groups and channels.
- Gross margin expanded 200bps YoY as raw material cost % of sales fell from 45.0% to 42.9% (input cost tailwind).
- EBITDA margin up 251bps YoY to 24.1%, despite 40%+ increase in advertising spends.
- PAT grew 48.3% YoY, with EPS at ₹4.97 (+48.4% YoY).
- Export sales grew 35.6% YoY, outpacing domestic growth.
- All four product groups recorded strong double-digit growth; Confectionery and Beverages notably strong.
- E-commerce and Quick Commerce sustained strong momentum, with rural distribution expanding.
Key concerns
- Revenue declined 5.5% sequentially (Q4 to Q1), partly seasonal but worth monitoring.
- Other expenses grew 29% YoY, faster than revenue, driven by higher A&P – may pressure margins if not sustained by volume growth.
- Exceptional charge of ₹62.3 M, though small, needs clarity on nature.
Research and educational content only. Not investment advice.