Nestle India flags food inflation, cocoa risks

Nestlé India has warned of rising food inflation and uncertain commodity prices, announcing strong growth in the September quarter. In the company's Q2 FY27 earnings commentary, chairman and managing director Manish Tiwary stated, "Rising inflation, particularly food inflation, is a reality." Cocoa prices remain volatile due to weather-related concerns in key producing regions, while sugar and edible oil prices have stabilized at high levels.

Milk prices have increased seasonally, but are anticipated to decrease as supplies expand. Coffee and wheat prices are predicted to remain within a range. Nestlé India aims to navigate the challenging cost environment through innovation, renovations, investments in brands, and a focus on productivity and efficiency. Despite the inflation warning, the company reported a 20.5% year-on-year sales increase to Rs 6,782.2 crore in the September quarter, with profit after tax rising 36.3% to Rs 1,026.8 crore.

The company also increased its advertising and marketing expenditure by 46% to support its brand investments. Nestlé India's confectionery business, which includes KitKat, Munch, and Milkybar, delivered another quarter of volume-led double-digit growth, with KitKat gaining market share and momentum in Munch and Milkybar.