Nestle shares fall 5% to emerge as top Nifty loser as Q1 net profit misses estimates

The shares of Nestle India crashed nearly 5 percent on July 24 after the company's Q1 net profit missed analysts' expectations. The stock is currently the top loser on the benchmark Nifty 50 index.

Nestle reported a net profit of Rs 647 crore for the first quarter of the financial year 2026. This marks a 13% drop from the Rs 747 crore net profit reported in the corresponding quarter of the previous financial year. The net profit is significantly lower than the Rs 751 crore estimated on an average by brokerages polled by Moneycontrol.

The shares of the company were trading at 2,340 in the afternoon. The sharp fall in the share price pushed the Nifty FMCG index down more than 1 percent to hover around 55,143.

Revenue from operations beats estimate

The FMCG major's revenue from operations rose 6 percent on-year to Rs 5,096 crore in Q1 FY26. It had earlier reported revenue from operations at Rs 4,814 crore in Q1 FY25. The revenue is higher than the Rs 5,082 crore estimated on an average by brokerages polled by Moneycontrol.

During the quarter under review, Nestle's income from domestic sales rose over 5 percent on-year to Rs 4,860 crore, while exports rose nearly 16 percent to Rs 214 crore. Its total sales grew more than 6 percent on-year to Rs 5,074 crore in Q1 FY26.

'Elevated consumption prices impacted earnings'

Elevated consumption prices across the commodity portfolio impacted the FMCG company's earnings this quarter, said the firm's current Chairman and MD Suresh Narayanan. Higher operations costs as a result of significant expansion in manufacturing in the last seven to eight months, and higher finance costs due to borrowing from commercial banks to fund temporary operational cash-flow requirements further impacted earnings, he added.Suresh Narayanan however added that the firm has noticed stabilizing prices for edible oil and cocoa, a declining trend in coffee and stabilizing to modest increase in pricing of milk. "The Powdered and Liquid Beverages category sustained its position as one of the largest growth

drivers with another robust performance this quarter registering strong double-digit growth. This performance builds on a strong foundation following high double-digit growth in the corresponding quarter. NESCAFÉ further solidified its leadership in the coffee category by gaining additional market share. The brand continued to democratize coffee through affordable packs, while also expanding the premium segment with NESCAFÉ Gold and NESCAFÉ Roastery. NESCAFÉ RTD continued to demonstrate strong growth," he said.

The firm saw mixed growth performance in milk products and nutrition category, with certain segments showing growth while a few had muted performance. "Significant rise in demand over recent quarters has led to growth in urban markets. RUrban markets too have demonstrated positive growth, signalling a favourable shift in market dynamics and contributing to overall market resilience," the firm's CMD said.

'Coffee prices expected to remain range-bound, Milk prices likely to fall'

According to Nestle, coffee prices expected to remain range-bound at current lower levels, as the upcoming Vietnam crop appears to be normal. Cocoa and edible oil prices have stabilized and remain range-bound, while milk prices will likely decrease with the onset of a favorable monsoon and flush season, the firm added.

Manish Tiwary appointed as Nestle India CMD

Along with the Q1 results, the FMCG major’s board also approved the appointment of Manish Tiwary as the Chairman and Managing Director, effective from August 1 August this year. Current CMD Suresh Narayanan will relinquish his office upon his retirement on July 31.

"I am confident that Nestlé India will continue to thrive and soar new heights - moving forward with greater focus and readiness for the future, fostering an inclusive and compassionate environment where every voice is valued. With much gratitude, it has truly been an honour and privilege to serve you. I carry with me cherished memories of the decade gone by. I take this opportunity to extend my best wishes to Mr Manish Tiwary as he takes on the role of Chairman and Managing Director of Nestlé India from 1st August 2025," said current CMD Suresh Narayanan.Also read: Our LIVE blog on Q1 results