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Nestle Q1 preview: What to expect from Kitkat maker in June quarter?
Further, a surge in the depreciation, given the commissioning of new capital expenditure and lower other non-operating income, is likely to have a bearing on earnings growth.
Nestle Q1 results 2025: Profit estimates
Brokerages tracked by Business Standard estimate Nestle's net profit to decline 5.6 per cent year-on-year (Y-o-Y) on average, to ₹731.85 crore as compared to ₹775.9 crore. Sequentially, the net profit is expected to fall 17.34 per cent from ₹885.4 crore in Q4FY25.
Nestle Q1 results 2025: Revenue expectations
Here's how brokerages expect Nestle to fare in Q1FY25:
Kotak Institutional Equities: Analysts at the brokerage forecast 6.6 per cent Y-o-Y growth in net revenues, led by 6.5 per cent/7 per cent growth in domestic/exports as against 4.2 per cent/(-)8.7 per cent in Q4FY25.
Consolidated revenue is pegged at ₹5,130.4 crore as compared to ₹4,814 crore a year ago.
Volume (tonnage) is expected to grow at 3 per cent, a slight improvement against 2 per cent in Q4. The gross margin is likely to contract 65 basis points (bps) Y-o-Y to 57 per cent as against 65 bps decline in Q4, impacted by high inflation in coffee, cocoa, milk, wheat and palm oil prices.
Earnings before interest, tax, depreciation and amortisation (Ebitda) is anticipated to grow at 8.1 per cent to ₹1,191.3 crore Y-o-Y as compared to ₹1,102.3 crore and Ebidta margin is pegged at 23.2 per cent, up 30 bps Y-o-Y from 22.9 per cent.
Emkay Global Financial Services: The brokerage sees a 5 per cent topline growth in Q1FY26 to ₹ 5047.5 crore Y-o-Y with 1 per cent volume growth. To negate the inflationary stress, the company has selectively effected price hikes, although Emkay sees price growth to be lower amid increased promotion intensity.
Gross margin is expected to contract 110 bps Y-o-Y to 56.5 per cent. Ebitda margin is likely to see a 70 bps contraction Y-o-Y to 22.2 per cent from 22.9 per cent. Ebitda is likely to grow 2 per cent to ₹1,121.8 crore as compared to ₹1,102.3 crore.
Motilal Oswal Financial Services: Motilal analysts expect Nestle's overall sales to grow 5.7 per cent Y-o-Y, led by 5.5 per cent growth in domestic sales and 10 per cent growth in export sales. However, while demand recovery is underway, a higher dependency on urban markets may weigh on the company's volumes.
The company has most likely implemented a price hike in response to rising commodity prices. Motilal forecasts gross profit margin to contract 60 bps Y-o-Y to 57 per cent, impacted by a rise in raw material prices like coffee and edible oil, while a stable Ebitda margin of 23.3 per cent in Q1FY26 is expected.
Nuvama Institutional Equities: The brokerage reckons consolidated revenue to grow 4.7 per cent Y-o-Y in Q1FY26 to ₹503.87 crore. Domestic sales are likely to grow 4–5 per cent Y-o-Y, while domestic volumes shall grow 2–3 per cent Y-o-Y.
Exports revenue is likely to decrease by 2–3 per cent Y-o-Y. Nuvama expects price hikes of 3 per cent in Q1FY26, mainly led by coffee and premium chocolates.
The company's Ebitda is likely to grow 6.5 per cent Y-o-Y to ₹1,174 crore as compared to ₹1,102.3 crore. Given the benefit of the recent palm oil duty, Nestle's gross/Ebitda margin is expected to improve 115 bps/40 bps Y-o-Y to 56.5 per cent/23.3 per cent. As the urban slowdown tapers down likely by Q2FY26, demand trends are anticipated to further improve hereon.
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