Nestle India Q1FY26 (Standalone) results

• Nestle India (Nestle) revenue grew by 5.9% y-o-y to Rs. 5,096 crore, driven by 5.5% y-o-y growth in the domestic business to Rs. 4,860 crore, while export sales grew by 16% y-o-y to Rs. 214 crore. Revenue came in line with our and average street expectation of Rs. 5,070 and Rs. 5,090 crore respectively. Prepared Dishes and Cooking Aids, Powdered and Liquid Beverages and Confectionery bounced back to volume-led growth.
• Gross margin and OPM fell by 249 bps and 156 bps y-o-y to 55.2% and 21.6%, respectively impacted by elevated consumption prices across the commodity portfolio and higher operational costs owing to a significant capacity expansion. OPM came in much lower than our and average street expectation of 23.5%.
• Operating profit fell by 1.3% y-o-y to Rs. 1,100 crore. This coupled with higher depreciation and interest cost (up 39% and 48%, respectively) and lower other income (down 90% y-o-y) led to 11.7% y-o-y decline in the PAT to Rs. 659 crore (lagging our and average street expectation of Rs. 749 crore).
• View: Overall, Nestle’s Q1FY26 performance was soft as multiple headwinds led to decline in OPM and double-digit decline in PAT. We shall review our earnings estimates and come out with a detailed note soon. Currently we have a Buy rating on the stock.

Results (Standalone)                                                                         Rs. crore

Actual vs estimates                                                   Rs. crore