Maggi noodles maker Nestle India will showcase its earnings report for the fourth quarter of the previous fiscal year on April 24, 2025. For the quarter gone by, margins are likely to be under stress from high coffee and cocoa prices. Weak operational performance is also expected to drag the company's net profit.
According to a Moneycontrol poll of 11 brokerages, Nestle India is likely to report a 4.4 percent year-on-year rise in revenue at Rs 5,500 crore compared to Rs 5,268 crore reported in the same quarter last year.
Net profit for the January to March period is likely to fall nearly six percent to Rs 870 crore as against Rs 924 reported in the March quarter of the previous financial year.
Earnings estimates of analysts polled by Moneycontrol are in a diverse range. While even the most optimistic estimate sees Nestle India’s net profit tumbling by half a percent, the most pessimistic suggests the net profit could crack 9.5 percent on-year.
What factors are driving the earnings?
According to experts, increased competitive intensity in infant nutrition and downtrading in the coffee business to weigh on the revenue growth for the quarter.
Volume Growth: Experts are pencilling in low single digit volume growth, between two and three percent, as lower urban demand continues to impact Nestle India's topline growth. However, analysts at Kotak say the volume growth will be partly buoyed by some benefit in Maggi portfolio due to Maha Kumbh 2025.
Margins: EBITDA margin is likely to be under stress due to inflation in coffee, cocoa, wheat and vegetable oil, on a high base. However, the firm has undertaken some hikes in chocolates, coffee, and Maggi, which should lend some support.
Demand weak: Overall demand trends, have improved sequentially given marginal recovery in urban - however slowdown still persists. "As the urban slowdown tapers down (likely by Q2FY26) we estimate a demand trends to further improve from here on," said analysts at Nuvama Institutional Equities. Nestle India is seeing more of an impact from the lag in urban demand as a result of its urban-skewed portfolio mix.
Sharp fall in PAT: Kotak explained the sharp decline in net profit could be as a result of lower other income. Nestle India's cash balance is likely to be lower, following its investment of Rs 700 crore in a joint venture with pharma giant Dr Reddy's.
What to look out for in the quarterly show?
Analysts will closely monitor the management’s commentaries on demand and material costs. They will also pay attention to raw material prices and their effect on EBITDA margins, as well as the growing competitive pressure across segments.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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