Nestle India's margin drops 4.06 points sequentially despite 25.16% sales growth
Expenses grew 24.05% YoY, slower than sales, while the stock's +2.87% result-day gain was below its usual 3.46% move.
Filed 22 Jul 2026, 11:11 IST · Nestle India Ltd (NESTLEIND)
Key takeaways
- Nestle India's consolidated sales grew +25.16% YoY, while operating margin expanded 0.70 percentage points as expenses grew more slowly than revenue.
- Sequentially, operating margin narrowed 4.06 percentage points because revenue fell -5.48% while expenses declined only -0.31%.
- The stock rose +2.87% on results day, below its 3.46% median absolute move across the last eight result reactions.
Price around the results
YoY growth lifted operating profit
Consolidated revenue grew +25.16% YoY to Rs 6,378.18 cr, ahead of expense growth of +24.05%, which supported a 0.70 percentage-point expansion in operating margin. Operating profit therefore grew +29.31% YoY, faster than sales. Other income contributed only 1.7% of pre-tax profit, so reported earnings were not materially dependent on non-operating income.
Sequential margin reset after Q4 peak
Revenue declined -5.48% QoQ, but expenses fell only -0.31%, causing operating margin to narrow 4.06 percentage points. Higher interest costs, up +14.74% QoQ, added to the pressure, while the tax rate was broadly unchanged, rising 0.03 percentage points. The lower margin followed a 25.86% reading in Q4FY26.
Margins remain volatile across recent quarters
Operating margin moved from 23.62% in Q4FY25 to 21.10% in Q1FY26, recovered to 22.13% in Q2FY26, fell to 18.91% in Q3FY26, and reached 25.86% in Q4FY26 before returning to 21.80% this quarter. This is a sequential decline after the Q4 rebound, rather than a third straight quarterly decline. YoY net profit grew +48.27%, helped modestly by a 0.42 percentage-point lower tax rate and interest costs that fell -10.04%.
Result-day gain was ordinary for Nestle India
The consolidated result was followed by a +2.87% stock move on the result date, with a -0.28% move on the next session. Across the last eight result reactions, the stock rose four times and fell four times, while the median absolute move was 3.46%. The current reaction was therefore smaller than its typical move, despite trading volume reaching 3.57 times the reference level.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹6,378 cr | ₹6,748 cr | -5.48% | +25.16% |
| Other income | ₹22 cr | ₹18 cr | +21.79% | +456.19% |
| Expenses | ₹4,988 cr | ₹5,003 cr | -0.31% | +24.05% |
| Operating profit | ₹1,391 cr | ₹1,745 cr | -20.31% | +29.31% |
| Operating margin (%) | 21.80% | 25.86% | — | — |
| Interest | ₹42 cr | ₹37 cr | +14.74% | -10.04% |
| Depreciation | ₹188 cr | ₹205 cr | -8.18% | +19.66% |
| Profit before tax | ₹1,324 cr | ₹1,513 cr | -12.44% | +47.08% |
| Tax | ₹349 cr | ₹398 cr | -12.35% | +44.78% |
| Net profit | ₹959 cr | ₹1,111 cr | -13.70% | +48.27% |
| EPS (₹) | ₹4.97 | ₹5.76 | -13.72% | -25.93% |
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +2.87% | +3.66% |
| Next session | -0.28% | — |
Volume on the results session was 3.57× its 20-day average.
What to watch
- Whether operating margin recovers from 21.80% after the 4.06 percentage-point QoQ decline.
- Whether expense growth stays below revenue growth, after +24.05% versus +25.16% YoY this quarter.
- Whether interest costs remain below the Rs 42.18 cr reported this quarter after rising +14.74% QoQ.