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.

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles

Business Standard
29 minutes ago
- Business Standard
Nestle shares slip 7% in two days of posting Q1; what should investors do?
Nestle India Q1 results review: The fast-moving consumer goods (FMCG) major Nestle shares slipped 2 per cent on Friday, logging an intra-day low of ₹2,269.85 per share on the BSE. The stock fell nearly 7 per cent in two days after the company posted its Q1 numbers on Thursday, during market hours. At 9:40 AM, Nestle share price was trading 0.85 per cent lower at ₹2,300.4 per share on BSE. In comparison, BSE Sensex was down 0.35 per cent at 81,898.93. The market capitalisation of the company stood at ₹2,22,064.68 crore. Nestle Q1FY26 results Nestle, in the first quarter of FY26 (Q1FY26), reported a 13 per cent decline in the consolidated net profit Y-o-Y to ₹646.6 crore, as compared to ₹746.6 crore. However, its revenue from operations grew 5.8 per cent to ₹5,096 crore, from ₹4,814 crore a year ago. The company reported an Earnings before interest, tax, depreciation, and amortisation (Ebitda) at ₹34.2 crore, as compared to ₹21.3 crore, up 60.3 per cent Y-o-Y. However, Ebitda margins stood at 24.8 per cent, as against 26.5 per cent. Brokerage view on Nestle India Most brokerages have cut their target price on Nestle India stock on higher inflation concerns, and elevated depreciation/finance costs due to higher capital expenditure. ICICI Securities has maintained a 'Hold' on Nestle and has cut the target to ₹2,400 per share from ₹2,500. Nestle reported a stable quarter, according to the brokerage; however, the largest category, milk products and nutrition, appeared to be the problem child. E-commerce salience at 12.5 per cent of revenue is good and could create a material unlocking opportunity if executed well, noted ICICI Securities. The brokerage said it will remain watchful of new growth vectors under Manish Tiwary, new CMD, effective August 1. 'Nestle India requires a strategy and execution refresh,' the brokerage note read. Nuvama Institutional Equities has maintained a 'Buy' rating, but has cut the target to ₹2,820 per share from ₹2,825. The brokerage also lowered its FY26E/27E earnings per share (EPS) estimates by 6.8 per cent/4.1 per cent, as its sees depreciation/finance cost to remain elevated due to higher capex. Motilal Oswal maintained a 'Neutral' rating with a target of ₹2,400 per share. According to the brokerage, going forward, the volume growth is expected to be in low single digits. Further, even though the capacity expansion will drive long-term growth, short-term margin pressure is expected to stay. Macquaire also continued with a 'Neutral' rating on the stock and cut the target to ₹2,250 per share from ₹2,375, according to reports. The global brokerage sees near-term growth headwinds for Nestle as management commentary suggested milk and nutrition sales, the largest category of the company, are yet to recover and sees benign coffee prices hurting pricing growth in the beverages segment ahead.
&w=3840&q=100)

Business Standard
31 minutes ago
- Business Standard
SRF to invest nearly ₹750 cr to set up agro-chemical, BOPP film plants
Chemical firm SRF Ltd will invest nearly ₹750 crore to set up an agro-chemical plant in Gujarat and a BOPP film manufacturing facility in Indore as part of its expansion plan. Gurugram-based SRF Ltd has a diversified business comprising fluorochemicals, specialty chemicals, performance films & foil, technical textiles, and coated and laminated fabrics. The company's board on July 23 approved the setting up of a facility to produce agrochemicals at Dahej, Gujarat, at a cost of ₹250 crore. The facility at Dahej will produce 12,000 tonnes per annum of an agrochemical intermediate. This project will be completed in 18 months, according to the latest regulatory filing. The board also approved a ₹490 crore investment to set up a BOPP (Biaxially Oriented Polypropylen) film manufacturing facility in Indore, featuring a state-of-the-art 10.4m wide Bruckner film line and a metalliser. The project is expected to be completed in 24 months. SRF Ltd has posted a 71 per cent increase in its consolidated net profit to ₹432.32 crore during the April-June period of this fiscal from ₹252.22 crore in the year-ago period. The income from operations increased 10 per cent to ₹3,818.62 crore during the first quarter of this fiscal from ₹3,464.12 crore in the corresponding period of the preceding year. "In spite of a weak summer and prevailing global uncertainties, we have had a good start to the year. We remain cautiously optimistic for the rest of the year. Our capital expenditure plans continue to be robust," SRF Chairman and Managing Director, Ashish Bharat Ram, said. In the 2024-25 fiscal, SRF Ltd posted a consolidated net profit of ₹1,251 crore on a total income of ₹14,825.79 crore. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Business Standard
5 hours ago
- Business Standard
Nestle Q1: What should your investment strategy be? Brokerages decode
Nestle India Q1 results review: The fast-moving consumer goods (FMCG) major Nestle reported its June quarter (Q1FY26) results on Thursday, during market hours. Post the result release, the stock fell and closed 5.4 per cent lower at ₹2,320.15 per share on BSE. The selling pressure was on the counter as the company's net profit slipped 13 per cent year-on-year (Y-o-Y) to ₹647 crore. Nestle Q1FY26 results Nestle, in the first quarter of FY26 (Q1FY26), reported a 13 per cent decline in the consolidated net profit Y-o-Y to ₹646.6 crore, as compared to ₹746.6 crore. However, its revenue from operations grew 5.8 per cent to ₹5,096 crore, from ₹4,814 crore a year ago. Brokerage view on Nestle India Most brokerages have cut their target price on Nestle India stock on higher inflation concerns, and elevated depreciation/finance costs due to higher capital expenditure. ICICI Securities has maintained a 'Hold' on Nestle and has cut the target to ₹2,400 per share from ₹2,500. Nestle reported a stable quarter, according to the brokerage; however, the largest category, milk products and nutrition, appeared to be the problem child. E-commerce salience at 12.5 per cent of revenue is good and could create a material unlocking opportunity if executed well, noted ICICI Securities. The brokerage said it will remain watchful of new growth vectors under Manish Tiwary, new CMD, effective August 1. 'Nestle India requires a strategy and execution refresh,' the brokerage note read. Nuvama Institutional Equities has maintained a 'Buy' rating, but has cut the target to ₹2,820 per share from ₹2,825. The brokerage also lowered its FY26E/27E earnings per share (EPS) estimates by 6.8 per cent/4.1 per cent, as its sees depreciation/finance cost to remain elevated due to higher capex. Motilal Oswal maintained a 'Neutral' rating with a target of ₹2,400 per share. According to the brokerage, going forward, the volume growth is expected to be in low single digits. Further, even though the capacity expansion will drive long-term growth, short-term margin pressure is expected to stay. Macquaire also continued with a 'Neutral' rating on the stock and cut the target to ₹2,250 per share from ₹2,375, according to reports. The global brokerage sees near-term growth headwinds for Nestle as management commentary suggested milk and nutrition sales, the largest category of the company, are yet to recover and sees benign coffee prices hurting pricing growth in the beverages segment ahead.