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Nestlé India at its analyst meet, highlighted strong headroom for growth

ICICIdirect Research 05 Aug 2026 DISCLAIMER

News: Nestlé India at its analyst meet, highlighted strong headroom for growth, driven by improvement in household penetration, premiumisation, distribution expansion in rural market and strong growth on alternate channels of Q-Comm/E-comm. The company’s revenues grew at CAGR of 11.3% YoY with volume growing at CAGR of 4.2% over FY21-26. However, sales volume grew by 10.7% in FY26 with strong double digit volume growth in categories such as confectionery and Beverages (coffee). Lower penetration in categories such as Noodles (at 37%), Coffee (at 33%) and Kit-Kat (at 23%) provides a large opportunity for growth in the Indian market. Premium products, contributing 14% of revenues, growing at 500bps+ ahead of core revenue growth. Retail reach has expanded to 6.2 mn outlets and village coverage to 2.19 lakh villages. These categories were supported by capex investment of Rs64bn in the last five years; Noodles, Coffee and Chocolate capacity went up by 41%. Further advertisement spends have gone up by 40% over the last few quarters improving the visibility of products on key platforms. On the other hand, it focused on cost optimisation through technological upgrade and supply efficiencies aiding cost saving of 1.9% of sales over 2021-24 (2.6% of sales in 2025).

View: Post change in leadership, the company focused on improving growth through improving its product portfolio through premiumisation, scale-up presence on digital platforms and high investment on brands to drive consistent double digit growth in the medium to long run. Global uncertainties and rising inflation might act as a headwind for industry in the near term. However, presence in low penetration categories and low penetration in the rural markets will help to sail through the tough times in the near term.

Impact: Positive

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