On Thursday, the company announced that it will continue to accelerate investments in brands and manufacturing capacity to drive long-term growth.

A new noodles production line has been commissioned at its Sanand factory in Gujarat, reaffirming its commitment to "manufacturing in India."

Nestlé India also announced plans to introduce more innovations and enhance its existing portfolio with premium offerings, while increasing marketing expenditure to expand its presence across various geographies and channels.

On Thursday, the Swiss food giant announced it would cut 16,000 jobs globally over the next two years in an effort to boost sales and improve profitability. Of these, the company will lay off 12,000 white-collar employees.

Responding to a Mint query, a Nestle India spokesperson said, "The workforce reduction applies to markets and functions globally over the next two years. The plan will be subject to consultations with various markets."

Total sales at the maker of Maggi noodles rose 10.9% to ₹5,630.2 crore for the quarter, driven by strong domestic demand and volume-led growth across its key categories, as several categories it operates in benefited from the revised and lowered goods and services tax (GST) implemented towards the end of the quarter.

Analysts said Nestlé India's performance beat both their and Street estimates, marking a strong start to the FMCG earnings season.

"The company recorded its highest-ever quarterly sales under new managing director Manish Tiwary, with three out of four product groups delivering double-digit volume growth. While margins were slightly lower year-on-year, with Ebitda margins at 21.9% (down 97 basis points YoY but up 32 basis points sequentially), profitability remained ahead of expectations," said Abneesh Roy of Nuvama Institutional Equities.

The company reported a slight miss on margins, but earnings before interest, taxes, depreciation, and amortization (Ebitda) was ahead of estimates, said Roy.

GST benefits

Analysts added that recent GST rate revisions—bringing most of Nestlé's portfolio under the 5% tax slab and ultra-high temperature milk to 0%—could lead to short-term de-stocking by trade partners but are likely to boost consumption and restocking in the coming months, with minimal impact on margins or working capital.

Nestle India's stock closed at ₹1,276.55 on Thursday, up 4.5%, even as the benchmark Sensex ended the day higher by 1.04%.

Nestle India has entered a "constructive phase" led by GST-driven price rationalisation, which may improve affordability and potentially lift volumes by 200-250bps in the near term across key categories, said Manoj Menon, research analyst at ICICI Securities.

During the quarter, Nestle India's domestic demand remained steady, with urban growth intact and rural recovery aided by its extensive reach of 2.7 million retail outlets.

"Infant nutrition (28% of sales) has bottomed out, but the chocolates, cocoa and coffee (30% of sales) segment continues to see healthy traction with stable prices and strong consumer acceptance. Meanwhile, input cost pressures have eased, with the overall raw material basket up only 2-3% year-on-year (FY25), supporting margin recovery," said Menon in a post-earnings note on the company.

Stable commodity costs

Nestle, which sells a range of products in India, including chocolates, milk, infant nutrition, noodles, and coffee, was particularly affected by the higher prices of coffee, prompting the company to raise prices.

For instance, in the fourth quarter of the previous fiscal year, average prices for Arabica coffee increased by 97%, while Robusta prices rose by 65% year-on-year.

On the commodity front, the company expects milk prices to soften after the festival season as the flush period begins, while coffee prices are likely to stabilize with normal crop outlooks in India and Vietnam.

Cocoa prices are projected to balance as demand normalizes, although edible oil prices are expected to remain firm amid tight global supply conditions.

Nestlé India is among the first large FMCG companies to announce its quarterly earnings.

The quarter is significant as the company underwent a transition to revised GST rates. While several large food companies have benefited from lower prices following the rationalization, many lost some sales in the first half of September as retailers and distributors reduced inventory in anticipation of the lower rates.

Nestle stated that growth during the quarter was broad-based across all product categories.

Maggi Noodles and Masala-ae-Magic led the prepared dishes and cooking aids segment, aided by targeted rural pricing, festive campaigns, and digital-first product launches such as Maggi Double Masala. In confectionery, Kitkat continued to be the standout performer, supported by rural distribution expansion and premium variants.

The milk products and nutrition segment saw mixed trends. The pet food business continued to scale rapidly, with the Purina pet food brand achieving its highest-ever quarterly turnover.

Manish Tiwary, chairman and managing director of Nestlé India, who took over the role on 1 August, said the recent amendments to GST rates are a positive step for consumers and will help drive affordability and boost overall sector growth.

"We remain focused on our consumers through high-quality products, omni-channel availability, and accelerated investments in brands and manufacturing. Our strategy of penetration-led volume growth ensures we are accessible across diverse geographies and platforms as we build a future-ready Nestlé India," he added.