Nestle India Posts Strong Q2 Revenue Growth Even As Stock Price Drops

Nestlé India Ltd reported a revenue of ₹6,782 crore for the second quarter of financial year 2027, backed by double-digit volume growth across multiple product categories. Despite the solid financial results, the company stock fell 7.7% on Thursday after the announcement and dipped again on Friday.

Sales Breakdown

Domestic sales grew 20.4% year-on-year to ₹6,515 crore, accounting for 96% of the total revenue, while export sales rose by 22%. Confectionery goods posted double-digit volume gains, driven by market share increases for Kitkat along with steady sales for Munch and Milkybar. Maggi noodles expanded further into rural markets, and prepared dishes saw strong overall demand. Advertising spend also jumped significantly, rising 46% year-on-year in the quarter with about 55% going toward digital platforms.

Market Pressures

Even with higher marketing costs, the company saw its Ebitda margin expand by 195 basis points to reach 23.8%. Gross margin grew by 243 basis points to 56.9%. However, analysts note that rising costs for cocoa, sugar, and edible oil pose ongoing risks to future margins. The stock has dropped 18.5% from its 52-week high of ₹1,553 recorded on August 7, and experts expect share prices to stay range-bound in the near term due to high valuations compared to the broader sector.

Context

Packaged food makers often face cost swings when global commodity prices shift due to weather patterns or geopolitical tensions. Companies typically try to balance these pressures by investing in premium product lines and adjusting marketing strategies to protect their profit margins.