Nestlé India's Q3 Highlights Resilient Demand in Dairy Amid Cost Challenges
Nestlé India has announced its third-quarter results, showcasing robust consumer demand across nutrition and dairy-related categories, even amid persistent input cost challenges. The company recorded a notable increase in profitability alongside record quarterly sales, driven by volume-led growth and deeper market penetration.
In the milk products and nutrition segment, Nestlé India experienced steady mid-single-digit growth. This performance highlights stable demand in categories closely tied to the dairy value chains, despite inflationary pressures on household budgets.
A significant aspect of the quarter was the firm milk prices, which remained elevated despite the flush season, a period typically associated with higher supply and softer procurement rates. This suggests a structural tightness in milk availability, driven by sustained demand from both liquid milk and value-added dairy segments.
The firm milk prices benefit farmers in the short term but create margin pressures for processors. Nestlé India's ability to maintain profitability under these conditions is attributed to improved operating leverage, premiumisation strategies, and disciplined cost management.
Additionally, the company increased its consumer-facing advertising and media spend by 42 percent, aiming to premiumise its portfolios and expand consumption occasions. Capacity expansion efforts indicate confidence in medium-term growth across food and dairy-linked categories.
Nestlé India also reported accelerating growth in general trade, particularly in rural markets, alongside robust performance in e-commerce and quick commerce. This expansion is reshaping demand distribution, enabling the company to reach underpenetrated regions with higher-margin packaged offerings.
Finally, the company noted elevated edible oil prices while coffee costs remained stable but lower compared to the previous year. These factors, combined with firm milk procurement rates, are expected to keep cost structures elevated in the near term.
