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Informist, Wednesday, Jan. 28, 2026

 

By Arya S. Biju

 

MUMBAI – Higher domestic volumes supported by the reduction in the goods and services tax, coupled with higher exports, are expected to drive a low-double-digit on-year rise in Nestle India Ltd.'s top line for the December quarter. Brokerages also expect the country's largest instant noodles maker to report a mid-single-digit on-year rise in its bottom line for the reporting quarter, after posting a decline for three straight quarters. Meanwhile, higher advertising costs and depreciation and amortisation expenses are expected to limit the company's bottom-line growth, according to brokerages.

 

The fast-moving consumer goods major's bottom line for the December quarter is expected to rise around 6% on year to INR 7.36 billion, according to the average of estimates from 12 brokerages. However, net profit is seen falling by over 2% on a sequential basis. 

 

The company, which sells the Maggi brand of instant noodles and the Nescaf brand of instant coffee, is expected to report revenues of INR 52.77 billion, up over 10% on year, according to the average of estimates. This, however, is slightly below the 11% on-year rise in revenue it reported in the trailing quarter. On a sequential basis, the company's net sales for the reporting quarter are expected to fall 6.5%

 

The highest estimates for both top line and bottom line of the company are by Nirmal Bang Equities Pvt. Ltd. at INR 54.97 billion and INR 7.64 billion, respectively. It expects the company's quarterly performance to be supported by a low double-digit rise in volumes, well above the six-year compound annual growth rate of 5.6%.

 

On the other hand, the lowest estimates for both the top line and the bottom line are from Systematix Shares and Stocks (India) Ltd., at INR 51.36 billion and INR 6.95 billion, respectively. It expects higher advertising and distribution costs to impact the company's bottom line for the reporting quarter. 

 

The company's top line for the reporting quarter is expected to be primarily driven by a rise in its sales volume, supported by a consumption boost from the reduction in the goods and services tax, brokerages said. The company's domestic sales volumes for the quarter are expected to rise in the low single digits to early double digits on a year-on-year basis, estimates from nine brokerages showed. Domestic sales had accounted for nearly 96% of the company's total sales in the September quarter. 

 

"We anticipate early double-digit sales and volume (growth) respectively on post GST recovery," brokerage Prabhudas Lilladher Pvt. Ltd. said in a note. "Expect volume growth 4% YoY and 3.5% price/mix growth," brokerage Systematix Shares and Stocks said. It expects double-digit volume growth for the company's instant noodles brand Maggi and a near-double-digit rise in sales of coffee and chocolates. Meanwhile, sales volume of the company's infant nutrition segment is expected to grow by mid-to-high single digits, as sales in some regions were impacted while those in some others recovered, Systematix said. 

 

The company's exports for the quarter are expected to grow 11% on year, Kotak Securities Ltd. said. Nuvama Wealth Management Ltd. expects the company's export revenues to grow 12-14%, down from the 14.4% on-year rise it reported in the September quarter. 

 

Nestle India's gross margin for the December quarter is expected to contract 75-140 basis points on year, estimates from four brokerages showed. "We see gross margins to decline by 139 bps on a YoY basis to 55.0% due to key input costs being inflationary, including milk prices and arabica coffee, which are trading at higher levels, however, robusta prices are relatively stable," YES Securities said in a note.

 

Emkay Global Financial Services Ltd. expects the year-on-year contraction in gross margin to be limited to 75 bps, driven by a better sales mix and some comfort from raw-material prices. Unlike most brokerages, Nuvama expects the company's gross margin for the quarter to inch up 21 bps on year to 56.6% due to stable input costs. 

 

The company's earnings before interest, tax, depreciation, and amortisation margin for the reporting quarter is expected to decline 20-60 bps on year, estimates from five brokerages showed. As in the case of gross margin, Nuvama expects the company's EBITDA margin for the quarter to improve by 53 bps on year. 

 

The company's EBITDA for the December quarter is expected to be INR 11.92 billion, according to the average of estimates from 11 brokerages. Estimates for the company's EBITDA range from INR 11.37 billion by Systematix Shares and Stocks to INR 12.37 billion by Motilal Oswal Financial Services Ltd. 

 

The Indian arm of the world's largest food company will announce its December quarter earnings Friday. The company's performance in the noodles and infant nutrition segments will be closely monitored by the Street, Systematix Shares and Stocks said. Commentary on raw material prices will also be watched, the brokerage added.  

 

Wednesday, shares of Nestle India closed at INR 1,292.40 on the National Stock Exchange, down 0.8%. The stock is up just over 1% since the company announced its September-quarter earnings on Oct. 16, but is down around 7% from its all-time high of INR 1,389 on Sept. 27, 2024. 

 

Of the 13 research reports on the company available with Informist, five have a 'hold' or equivalent recommendation on the stock with an average target price of INR 1,334, indicating an over 3% upside over the closing price Wednesday. Of the remaining eight, four have a 'buy' or equivalent call on the stock and the other four have a 'sell' or equivalent recommendation.

 

The following are the Oct-Dec earnings estimates for Nestle India from 12 brokerages in descending order of the estimate of net profit in INR billion:

 

Brokerage	Net Sales	Net Profit	EBITDA
Nirmal Bang Equities Pvt Ltd	54.97	7.64	12.37
Motilal Oswal Financial Services Ltd	53.54	7.61	12.37
Nuvama Wealth Management Ltd	52.03	7.54	12.28
Prabhudas Lilladher Pvt Ltd	53.53	7.50	12.15
Mirae Asset Sharekhan Ltd	52.68	7.45	-
Elara Securities (India) Pvt Ltd	52.32	7.41	11.42
Emkay Global Financial Services Ltd	52.51	7.38	11.94
Kotak Securities Ltd	52.58	7.32	12.04
Nomura Equity Research	52.73	7.21	11.75
JM Financial Institutional Securities Pvt Ltd	52.41	7.14	11.64
YES Securities (India) Ltd	52.57	7.13	11,83
Systematix Shares and Stocks (India) Ltd	51.36	6.95	11.37
Average	52.77	7.36	11.92

 

 

End

 

Edited by Saji George Titus

 

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