Packaged foods maker Nestlé India Ltd's consolidated net profit fell 13.4 per cent year-on-year in the quarter ended June 30 as higher raw material and finance costs dented earnings  despite robust growth in key categories. The fast moving consumer goods (FMCG) company reported a net profit of Rs 646.6 crore on July 24, missing Street estimates, as against Rs 746.6 crore in the same quarter last year.


Revenue from operations for the fiscal first quarter expanded 5.9% on-year to Rs 5,096.2 crore, a stock exchange filing showed. According to a Moneycontrol poll of nine brokerages, Nestle India's Q1 net profit was pegged at Rs 751 crore.

On a standalone basis, net profit fell 11 per cent to Rs  659.2 crore  in the quarter ended June 30. Meanwhile, domestic sales rose 5.5 per cent to Rs 4,860 crore and export sales jumped 15 per cent to Rs 213.95 crore.

The FMCG major's board approved appointment of Manish Tiwary as the Chairman and Managing Director, effective 1 August 2025. Current CMD Suresh Narayanan will relinquish his office as Chairman and Managing Director upon his retirement on 31 July 2025, said Nestle. The appointment comes as most consumer goods companies are rejiging the leadership amid tepid growth and investor pressure to perform.

Nestle India share price fell, and was trading down 5% at 2,325.6 on NSE after the results announcement, thus emerging as top loser on Nifty 50.

Higher costs bite

The Maggi noodles maker is battling cost inflation in key commodities such as cocoa and coffee, staples in its popular KitKat chocolates and Nescafe coffees.

"The quarter was impacted by elevated consumption prices across the commodity portfolio," Nestle India Chairman and Managing Director Suresh Narayanan said in a statement.


"We witnessed higher operations costs as a result of significant expansion in manufacturing in the last seven to eight months. Moreover, borrowing from commercial banks to fund temporary operational cash-flow requirements resulted in higher finance costs in the quarter. However, we have noticed stabilizing prices for edible oil and cocoa, a declining trend in coffee and stabilizing to modest increase in pricing of milk," added Narayanan.

Commenting on the coffee prices, Narayanan said, "Coffee prices expected to remain range-bound at current lower levels, as the upcoming Vietnam
crop appears to be normal. Cocoa and Edible Oil prices have stabilized and remain range-bound. Milk prices are anticipated to decrease with the onset of a favorable monsoon and flush season."

Volume-led growth across most categories

The company said it experienced robust performance across categories including  prepared dishes and cooking aids, powdered and liquid beverages and confectionery, with all of them registering a double -digit growth in the quarter.

It flagged strong performance of NESCAFÉ Classic, NESCAFÉ Sunrise, and NESCAFÉ GOLD.

"KITKAT emerged as the largest growth driver, achieving double-digit growth, particularly in RUrban markets, while continuing to gain market share," Narayanan said.

"Significant rise in demand over recent quarters has led to growth in urban markets. RUrban markets too have demonstrated positive growth, signalling a favourable shift in market dynamics and contributing to overall market resilience," he added.

Its newly acquired pet food business too witnessed a strong performance, primarily driven by the cat portfolio, the company said.