Nestlé India shares crash 9% despite strong Q2 numbers: What is spooking investors?

Nestlé India shares came under sharp selling pressure in the afternoon trade on Thursday, October 15, falling nearly 9% despite the FMCG major reporting strong revenue, net profit and volume growth for the September quarter (Q2 FY27).

However, some key numbers fell short of Street expectations, while concerns over rising food inflation and input costs may have added to investor worries about the company's profit margins.

The stock plunged as much as 8.87% to the low of ₹1,260.50 on the NSE. However, it recovered later but was still down 4.03% at ₹1,327.50 at 01:07 PM.

What the CEO said

Manish Tiwary, Chairman and Managing Director, Nestlé India, while commenting on the quarterly results, said that rising inflation, particularly food inflation, is a reality.

"We remain focused on navigating these external challenges through continuous innovation and renovation, sustained investments behind our brands, and an intensified focus on productivity and operational efficiencies to mitigate commodity cost pressures," Tiwary added.

Q2 FY27 earnings

"We continued to focus on efficiencies across our operations while significantly increasing investments behind our brands, with advertising and marketing spends up by 46%. EBITDA margin remained healthy at 23.8%. Profit After Tax (PAT) for the quarter stood at ₹1,026.8 crore, up 36.3% over the corresponding quarter," Tiwary added.

Commodity Outlook

Coffee and wheat are expected to remain range-bound, while sugar and edible oils have stabilised at elevated levels. Cocoa remains volatile due to weather-driven crop concerns in key origins.

Milk prices have strengthened seasonally but should ease as flush supplies arrive, it added.