Nestlé India Q3 Results FY26: Profit Rises to ₹1,018 Crore on 18.5% Sales Growth

Nestlé India reported strong double-digit sales growth in the December quarter, driven by broad-based volume expansion across product categories and channels. The FMCG major delivered its highest-ever quarterly turnover, supported by rural demand recovery, premiumisation, and strong momentum in beverages, confectionery, and prepared dishes.

Table of Contents

• Key Highlights
• Financial Performance
• Margin and Cost Structure
• Operational Growth Drivers
• Channel Performance
• Product Segment Trends
• Commodity and Input-Cost Outlook
• Capital-Flow and Institutional Impact
• Valuation Context
• FMCG Earnings Cycle Positioning
• Key Risks
• Management Outlook

Key Highlights

• Revenue rose to ₹5,643.5 crore in Q3 FY26.
• Domestic sales increased 18.3% year-on-year.
• EBITDA margin stood at 21.3%.
• Profit after tax came in at ₹1,018.1 crore.
• EPS increased to ₹5.28.
• Interim dividend declared at ₹7 per share.

The company reported strong volume-led growth across all product groups, with three of the four major categories recording double-digit growth.

Nestlé India Q3 Results FY26: Financial Performance

Total income for the quarter stood at ₹5,678.8 crore, compared with ₹4,784.2 crore in the same period last year. Profit after tax increased significantly to ₹1,018.1 crore, reflecting strong operating performance and exceptional adjustments.

Nestlé India Q3 Results FY26: Margin and Cost Structure

While sales growth remained strong, margin performance reflected a mix of higher input costs and increased brand investments. The EBITDA margin for the quarter stood at 21.3% of sales.

Cost of materials as a percentage of sales increased during the quarter, indicating commodity-driven input cost pressures. At the same time, the company increased media and advertising investments by over 40% year-on-year, supporting volume growth across categories.

This reflects a strategic decision to prioritize market share expansion and brand visibility during a demand recovery phase.

Nestlé India Q3 Results FY26: Operational Growth Drivers

Nestlé India’s quarterly growth was driven by a combination of volume expansion, rural demand recovery, and increased brand investments. The company reported its strongest volume growth in nearly five years.

Nestlé India Q3 Results FY26: Key Growth Drivers

• Broad-based double-digit growth across categories.
• Rural demand recovery and deeper distribution.
• Premiumisation in core product lines.
• Strong e-commerce and quick-commerce momentum.

Management highlighted that all business channels delivered strong double-digit growth during the quarter.

Nestlé India Q3 Results FY26: Channel Performance

General Trade

General trade recorded strong double-digit growth across all town classes, with rural markets leading the expansion. The company also strengthened retailer engagement through technology adoption and distributor-management systems.

E-Commerce and Quick Commerce

E-commerce channels sustained strong growth, supported by new product launches, festive-season demand, and improved platform availability. Quick-commerce platforms also contributed to higher in-home consumption of premium products.

Out-of-Home Business

Nestlé Professional, the company’s out-of-home business, delivered double-digit growth driven by expansion across beverage vending, confectionery, and cooking-aid categories.

Nestlé India Q3 Results FY26: Product Segment Trends

Confectionery

The confectionery segment was the fastest-growing category during the quarter, driven by strong volume growth in products such as KitKat, Munch, and Milkybar. Rural demand, premium product launches, and wider distribution supported growth.

Beverages

The powdered and liquid beverages segment recorded robust growth, marking the 18th consecutive quarter of double-digit sell-out growth. Nescafé continued to drive category expansion, adding over 4 million households to the coffee category during 2025.

Prepared Dishes and Cooking Aids

This segment reported strong double-digit value growth, supported by accelerated volume expansion in Maggi noodles and related products. New product launches and urban-consumption campaigns also supported category growth.

Milk Products and Nutrition

The milk products and nutrition segment reported mid-single-digit growth, with some categories showing improved trends and market-share gains.

Commodity and Input-Cost Outlook

Input-cost trends remain a key variable for Nestlé India’s margin outlook. According to the company:

• Milk prices remain elevated despite the flush season.
• Edible oil prices are expected to remain range-bound in the first half of 2026.
• Coffee prices have stabilised at lower levels due to favourable global crop yields.

These commodity trends will influence gross margins in the coming quarters.

Capital-Flow and Institutional Impact

Nestlé India remains one of the core large-cap consumption stocks in institutional portfolios. The company’s strong quarterly performance reinforces the defensive capital-flow characteristics of FMCG majors.

Institutional allocation toward Nestlé is typically driven by:

• High return ratios
• Stable demand across economic cycles
• Strong brand portfolio
• Consistent dividend payouts

The interim dividend of ₹7 per share continues the company’s track record of shareholder payouts.

Nestlé India Q3 Results FY26: Valuation Context

Nestlé India trades at premium valuation multiples compared with most domestic FMCG peers. This premium is supported by:

• Strong brand equity
• High pricing power
• Stable earnings profile
• Consistent cash-flow generation

Double-digit volume growth during the quarter reinforces the company’s long-term growth narrative, particularly in rural markets and premium segments.

FMCG Earnings Cycle Positioning

The FMCG sector typically operates in multi-year earnings cycles influenced by:

• Rural income trends
• Commodity cost cycles
• Pricing power and premiumisation
• Distribution expansion

Nestlé’s strong volume growth indicates that the sector may be entering a demand-recovery phase following a period of rural consumption softness.

As rural incomes stabilize and input-cost inflation moderates, FMCG companies typically experience:

1. Volume recovery
2. Margin expansion
3. Earnings upgrades
4. Valuation re-rating

Nestlé’s Q3 performance suggests early signs of this cycle transition.

Key Risks

• Commodity cost inflation, especially milk and edible oils.
• Slower-than-expected rural demand recovery.
• Competitive pricing pressure.
• Currency volatility affecting input costs.

Management Outlook

Management highlighted continued focus on:

• Innovation and premiumisation.
• Rural market expansion.
• Operational efficiency through automation.
• Strengthening e-commerce and quick-commerce channels.

The company expects continued growth supported by brand investments, capacity expansion, and consumer-demand recovery.

Internal Links

• ITC Q3 Results FY26
• HUL Q3 Results FY26
• Consumption Sector Outlook 2026

External Sources

• Nestlé India Investor Relations
• BSE India
• NSE India