Nestle India Q2 FY27 Results Analysis: PAT Jumps 36%, EBITDA Margin Expands 196 bps (NESTLEIND)
Nestle India Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 6,788.34 Cr (+20.28% YoY) and PAT growth of +36.32% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | October 15, 2026 |
|---|---|
| Quarter | Q2 FY 2026-2027 |
| Revenue (Q2) | Rs. 6,788.34 Cr (+20.28% YoY) |
| PAT (Q2) | Rs. 1,026.77 Cr (+36.32% YoY) |
| EBITDA margin | 23.80% (+196 bps YoY) |
| Market cap | Rs. 265,143.32 Cr |
| CMP | Rs. 1,375.00 |
Quarter Snapshot
Nestlé India grew revenue 20.28% YoY to Rs.6,788.34 Cr and PAT 36.32% YoY to Rs.1,026.77 Cr, its second consecutive quarter above 20% revenue growth, with EBITDA margin up 196 bps YoY to 23.80% despite advertising spends rising 46%. Material cost ratio improved 243 bps YoY to 43.12% despite cocoa, sugar and edible oil inflation, and management's margin guidance (in line with the 22–24% historical track record) is on track with H1 margin at 23.95%. H2 watch items are commodity pass-through — sugar +40%, edible oils +20%, cocoa +17% YoY — partially offset by the September edible oil duty cut.
Key Investment Insights
Key Positives
- Revenue grew 20.28% YoY to Rs.6,788.34 Cr, the second consecutive quarter above 20% growth
- PAT grew 36.32% YoY to Rs.1,026.77 Cr; normalized PAT of Rs.1,029.48 Cr shows one-time items do not distort the quarter
- EBITDA margin expanded 196 bps YoY to 23.80% while advertising and marketing spends grew 46% YoY
- Cost of materials ratio improved 243 bps YoY to 43.12% of sales despite cocoa, sugar and edible oil inflation
- Management reported double-digit volume growth across all product groups, extending a five-quarter double-digit volume streak through Q1 FY27
- CFO/PAT ratio of 1.13x with H1 free cash flow of Rs.1,789.75 Cr
- Borrowings of Rs.25.34 Cr against net worth of Rs.5,962.92 Cr, with cash of Rs.1,705.35 Cr
Risk Factors
- Other expenses grew 28.35% YoY, outpacing revenue growth of 20.28%, driven by advertising and marketing spends up 46% YoY
- EBITDA margin compressed 32 bps QoQ to 23.80% as the material cost ratio rose 26 bps QoQ, indicating commodity pass-through is beginning
- Commodity costs remain elevated: sugar +40%, edible oils +20% and cocoa +17% YoY, with cocoa volatile on weather-driven crop concerns
- Associate (Dr. Reddy's and Nestle Health Science Limited) drag on consolidated PAT widened to Rs.17.16 Cr in Q2 FY27 from Rs.10.03 Cr in Q2 FY26
- CFO declined 2.61% YoY despite PBT growing 41.2%, as inventory (+Rs.249 Cr) and receivables (+Rs.67 Cr) absorbed ~Rs.396 Cr of cash
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Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.