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News Topical, Digital Desk : Nestle India's September quarter (Q2) results have impressed brokerage firms. Despite a challenging environment, the company reported better-than-expected profits and sales. CLSA and Morgan Stanley both cited Nestle's strong domestic demand and volume growth as key positive factors. Both believe the company has the potential for double-digit volume growth and 12-month EPS growth across all segments.
Strong Revenue Growth
Nestle India's total revenue increased from ₹5,104 crore to ₹5,644 crore, a year-on-year increase of approximately 10.6%. All the company's key product segments—such as Maggi, Nescafé, and KitKat—delivered strong sales.
EBITDA Better than Expected The company's EBITDA was ₹1,237 crore, compared to market estimates of ₹1,170 crore. This means operational performance was stronger than expected. Margins Slightly Weaker EBITDA margin was 21.9%, compared to estimates of 22.1%. This reflects a slight increase in raw material costs and promotional expenses.
Profits Declined, But Better Than Expected The company's net profit declined from ₹986 crore to ₹753 crore year-on-year, but this was also better than the estimate of ₹710 crore. This means there was a decline in earnings, but less than expected. CLSA Report: Better than expected performance Brokerage CLSA said that Nestle India has performed better than expected even in a difficult business environment. According to CLSA, both the company's profits and sales have been higher than their estimates. Growth in the domestic market has been supported by an increase in volumes, which is a positive sign for the FMCG sector. The report said that Nestle has maintained its margins due to stable demand and price management. CLSA believes that the brand's hold remains strong in both urban and rural areas, due to which stable growth may continue in the coming quarters as well.
Morgan Stanley's opinion: Double-digit volume growth in every segment Morgan Stanley (MS) has also praised Nestle's quarterly results. According to the brokerage, the company's revenue growth has been excellent. Double-digit volume growth is expected in all segments, reflecting Nestle's strong demand and product mix. Morgan Stanley said that the company's EPS is likely to grow in the next 12 months, which will strengthen the value creation opportunities for shareholders.
Strong domestic demand has created balance Despite inflation and rising raw material costs, Nestle has maintained a good balance through its pricing and product strategy. According to reports, the company's core categories – Dairy, Beverages, Prepared Dishes and Confectionery – have registered strong volume growth. This benefit was clearly visible on both the company's revenue and margins. Nestle's results may increase investor interest in the stock in the coming days. After Q2, the market is hopeful that the company will be able to take better advantage of consumer demand trends, especially during the festive season.
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