Nestle India delivered exceptional first quarter results for FY27, with consolidated net profit surging 48% YoY to ₹975 crore compared to ₹659 crore in the same quarter last year. The FMCG major reported consolidated revenue from operations of ₹6,378 crore, marking a robust 25.2% year-on-year increase from ₹5,096 crore in Q1FY26. According to the latest financial data, the strong performance was driven by healthy double-digit volume growth and resilient demand across key categories. Profit before exceptional items and tax rose 47.77% YoY to ₹1,314.18 crore, while the company reported exceptional items of ₹6.23 crore primarily on account of restructuring costs related to employee severance compensation. Chairman and MD Manish Tiwary highlighted that "We delivered a strong quarter with sales growth of 25.4% led by volume growth. Sales stood at ₹6,363.3 crore, powered by continued consumer trust in our brands and a strong focus on execution."
The company's consolidated EBITDA for the quarter came in at ₹1,537 crore, registering a significant 39.7% increase from ₹1,044.77 crore in the corresponding quarter of the previous financial year. EBITDA margin improved substantially by 250 basis points to 24.1% from 21.6% in Q1FY26, demonstrating effective cost management and operational efficiency. This margin expansion reflects the company's focus on disciplined cost management and operational leverage, supporting the strong bottom-line growth despite input cost pressures. The margin also exceeded estimates of ₹1,354 crore by 13.6% and was 180 basis points higher than the estimated 22.3%, indicating superior operational performance. During the quarter, Nestle India further accelerated operational cost savings and continued to step up investments behind our brands, with advertising spends increasing by over 40%, as noted by Tiwary. However, operating margins moderated sequentially from 26.3% in the March 2026 quarter due to continued rise in brand and advertising investments, despite accelerated operational cost saving measures.
According to management commentary, all four product groups recorded strong double-digit growth during the quarter, supported by volume growth across channels. The confectionery business delivered volume-led double-digit growth, continuing to outperform the broader category with strong penetration gains, premiumisation, and e-commerce growth. The powdered and liquid beverages business reported its 20th consecutive quarter of double-digit growth, driven by coffee penetration and premium products, with Nescafe Sunrise and Nescafe Classic delivering robust growth while Nescafe Gold delivered robust growth at the premium end. Prepared dishes and cooking aids posted strong double-digit growth, led by focused innovations and sharper engagement with urban consumers, as well as rural reach expansion, with Maggi continuing its brand-building efforts through exclusive product drops and collaborations. Milk products and nutrition returned to broad-based, double-digit growth after being described as a laggard by domestic brokerage HDFC Securities. The pet food business achieved strong double-digit growth through portfolio expansion and wider distribution, while NESPRESSO expanded its footprint across Delhi NCR, Mumbai, and Bengaluru via boutiques, pavilions, and pop-up stores. The company expects demand momentum to remain healthy, supported by premiumisation, deeper rural penetration, product innovations and continued traction in quick commerce.
The company demonstrated exceptional international performance with export sales increasing 35.6% to ₹2,902.2 crore from ₹1,844.7 crore in the corresponding quarter last year, showing steady growth driven by stronger international market penetration and product portfolio additions. Domestic sales rose 25% to ₹6,073.05 crore from ₹4,860.01 crore in Q1FY26, while total sales for the quarter stood at ₹6,378 crore compared with ₹5,096 crore in the corresponding quarter last year. Total income in the first quarter of FY27 stood at ₹6,400.65 crore, up 25.5% as against ₹5,100.33 crore in the year-ago period. Despite geopolitical tensions, exports saw a massive 35.6% to 36% YoY growth, as noted by HDFC Securities. E-commerce continued to record strong growth, with quick commerce emerging as a key driver, and organised trade also posted double-digit growth across key categories. The company received 4-Star Export House status during the quarter and expanded exports through new MAGGI noodle variants in Canada, larger sauce packs for the HoReCa channel and wider MAGGI portfolio in Europe. Rural markets remained the fastest-growing segment, with an increase in rural distribution touchpoints supported by technology-led distribution initiatives, including DMS adoption at the sub-distributor level which helped deepen retailer engagement and improve execution across rural markets.
While the quarter delivered exceptional operational performance, brokerages have shifted their focus from execution to valuation concerns. Jefferies maintained a Hold rating and raised the target price to ₹1,425 from ₹1,325, describing the quarter as "another blockbuster" but noting that much of the optimism is already reflected in the stock's valuation. The brokerage expects growth rates to moderate from the second half of FY27 and believes there are better opportunities within the FMCG sector, adding that Nestle's valuation of around 70 times one-year forward earnings leaves little room for error. Macquarie maintained a Neutral rating and increased the target price to ₹1,575 from ₹1,400, highlighting stronger-than-expected sales and gross margins, with favourable input costs expected to continue supporting profitability. The common thread across both brokerage notes was clear that the quarter was strong, but the debate has shifted from execution to valuation concerns, with Nestle continuing to trade at a trailing price-earnings (P/E) multiple of around 75, which falls within its five-year valuation band of 75-78.
