Nestle India shares extended a downward trend for the second consecutive session, tumbling nearly nine percent over two days despite reporting a robust thirty-six percent year-on-year increase in consolidated net profit to 1,000.61 crore rupees for the second quarter of fiscal year 2027. Driven by broad-based demand, double-digit volume growth of approximately twelve percent, and selective price adjustments, the FMCG major saw its total revenue from product sales rise by 20.45 percent to 6,782.17 crore rupees. However, despite strong operational metrics that included an EBITDA expansion of 33.3 percent, market sentiment turned cautious as the company’s management flagged mounting inflationary pressures, particularly surrounding key agricultural commodities, edible oils, packaging materials, and volatile cocoa supplies. Chairman and Managing Director Manish Tiwary acknowledged that rising food inflation poses a challenging environment, prompting the company to focus on continuous innovation, operational efficiencies, and sustained brand investments to protect profitability. Market analysts and brokerages noted that while execution remains strong, investors are growing wary of near-term margin pressures and a moderating growth trajectory stemming from last year’s high base effect. Consequently, leading financial institutions like JM Financial and Elara Capital have trimmed their target prices while maintaining favorable ratings, emphasizing that while Nestle India possesses the pricing power and portfolio resilience to navigate macroeconomic headwinds, festive demand trends and volume sustenance will remain critical moving forward.
