Q1 earnings review: What Nestle India and Tata Consumer results say about FMCG demand

Tata Consumer Products and Nestle India, two of the country's leading fast-moving consumer goods (FMCG) companies, reported healthy June-quarter earnings, supported by steady revenue growth and improving margins.

Tata Consumer Products, which owns brands such as Tata Salt and Tata Tea, posted a 12% year-on-year increase in net sales to ₹5,349 crore for the April-June quarter, compared with ₹4,779 crore a year earlier.

Nestle India outpaced its peer, reporting a 25% year-on-year rise in net sales to ₹6,073 crore from ₹4,860 crore in the corresponding quarter last year.

Tata Consumer Products' net profit advanced 28% to ₹427 crore from ₹334 crore, and Nestle India's net profit advanced 48% to ₹959 crore from ₹647 crore in the year-ago period.

Both the companies reported stable operational performance as Tata Consumer Products' earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 19% to ₹724 crore and its EBITDA margin improved by 80 basis points to 13.54%.

Nestle India's EBITDA came in at ₹1,523 crore, up 41%, and its EBITDA margin improved by 270 basis points to 23.93%.

Nestle India said that all four product groups delivered strong double-digit growth, supported by high double-digit growth across channels.

Nestle India added that the powdered and liquid beverages product group recorded another quarter of strong and consistent performance, marking the 20th consecutive quarter of double-digit growth.

"This performance was powered by increased coffee penetration, accelerated premiumization, and deeper category relevance across consumer segments, supported by sustained brand-building that continues to strengthen our equity and by an expanding footprint," Nestle India said.

Nestle India said that e-commerce business witnessed strong momentum with quick commerce emerging as a key growth lever. Organised trade business delivered double-digit growth across key categories, driven by sharper in-store execution, impactful consumer activations, enhanced visibility, and continued expansion of the store footprint.

On the other hand, Tata Consumer Products said that its revenue from the salt business rose 7%. Its tea volumes rose 2%, but revenue declined as the benefit of lower tea cost was passed on to consumers and coffee continued its strong trajectory with a revenue growth of 24% in Q1FY27.

Tata Sampann, the company's whole spices, lentils and dry fruits business, posted a strong revenue growth of 58% and it strengthened its presence in the spices category by building a comprehensive whole spices portfolio covering major consumer need spaces.

Ready-to-drink business delivered 41% revenue growth. Growth was broad based across the portfolio with continued focus on premiumization and innovation. New flavour variants were introduced in Tetley Kombucha Zero– Cranberry and Pineapple to strengthen the zero-sugar beverages portfolio, Tata Sampann said.

Tata Starbucks recorded revenue growth of 11% backed by strong same-store sales growth. Tata Starbucks ended the quarter with 498 stores in India.

During the quarter, four new stores were opened, including two reserve stores in Kolkata and New Delhi, respectively, strengthening the premium portfolio, the company added.

Nestle India shares have surged as much as 2.4%, and Tata Consumer Products shares have gained 2.1% since their earnings were declared last week.