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📊 Nestlé India Limited – FY25 & Q4FY25 Results Analysis

Created by Piyush Patel_ in Company Update Visit: 58 26 Apr 2025

📊 Nestlé India Limited – FY25 & Q4FY25 Results Analysis

1. Key Financial Highlights

Sales Growth:

Q4FY25 Revenue: ₹55,038.8 million, up 4.5% YoY from ₹52,675.9 million.
FY25 Revenue: ₹202,015.6 million, up 3.3% compared to ₹195,633.7 million.

Volume Growth:

While specific volume % is not disclosed, management commentary highlighted "improving volume growth" across categories.
Beverages and Confectionery reported double-digit volume growth; Prepared Dishes and Cooking Aids returned to positive volume growth.

Profit Growth:

Q4FY25 Net Profit: ₹8,854.1 million, marginally down by 5.2% YoY.
FY25 Net Profit: ₹33,145 million, up 3.7% compared to ₹31,962.1 million.

Margins:

Margin	Q4FY25	Q3FY25	Q4FY24
EBITDA % (Profit from Operations/Revenue)	22.8%	20.3%	23.7%
Net Profit Margin	16.1%	14.5%	17.7%

Profit margins contracted QoQ due to higher raw material costs (material costs rose from 43.3% to 44.3% of sales YoY).

Segmental Growth:
(Company operates under a single segment: Food)

Powdered & Liquid Beverages: Highest contributor (NESCAFÉ Ready-to-Drink segment expansion).
Confectionery (KITKAT): High single-digit value and volume growth.
Milk Products & Nutrition: New CERELAC and CEREGROW launches boosted performance.
Petcare (PURINA): Highest ever double-digit growth.

2. Strategic Business Highlights

Domestic Sales: ₹52,349.8 million in Q4FY25; highest ever in any quarter.
E-commerce: Contributed 8.5% of domestic sales in FY25.
Out of Home (OOH): Strong double-digit growth; launched new B2B products like KITKAT Professional Spread.
Rural Penetration (RUrban Strategy): Touchpoints increased to 27,730 locations covering ~208,500 villages.

3. Industry KPIs

Raw Material Inflation: Cost of materials consumed to sales ratio increased to 44.3% in Q4FY25 from 43.3% in Q4FY24.
Channel Trends:

Quick commerce and organized retail expanding rapidly.
Premiumization (higher value products) accelerating.

4. Solvency, Liquidity, Profitability, and Cash Flow Ratios (FY25 vs FY24)

Metric	FY25	FY24	Analysis
Debt/Equity Ratio	0.18x	0.18x	Stable (Low leverage)
Current Ratio	0.80x	0.88x	Marginal decline (Higher borrowings for operations)
Interest Coverage Ratio	30.3x	37.7x	Slightly moderated but remains robust
Net Profit Margin	16.4%	16.3%	Stable profitability
Cash Generated from Operations	₹29,363 million	₹41,748 million	Significant decline (higher working capital needs)

Valuations:

CMP: ₹2,414
FY25 EPS: ₹34.38
P/E Ratio: ~70.2x (at CMP)
Premium valuations reflect high cash generation, strong brand equity, leadership position.

5. Near-Term and Long-Term Outlook

Aspect	Near-Term (6-12 months)	Long-Term (3-5 years)
Revenue Growth	Mid-single-digit growth driven by rural demand recovery and out-of-home expansion	8%-10% CAGR driven by innovation, premiumization, and rural penetration
Margin Outlook	Likely to face cost pressures from commodities in short term	Expected margin expansion as commodity pressures normalize and premium products scale up
Investment Strategy	Capacity addition of ₹6,500 crore till 2025; Odisha factory underway	Continued investments in product innovation, digital channels, and rural markets
Risks	Commodity inflation, rural slowdown risks	Regulatory changes, competition from local/regional brands

📌 Strategic Conclusion:

Nestlé India continues to fortify its leadership position with a well-orchestrated balance between volume recovery, margin protection, premiumization, and channel expansion. Despite near-term margin pressures, the company’s long-term secular growth story remains intact. Current valuations remain premium, thus any major correction could offer long-term strategic entry opportunities for investors.