Nestle Q2 preview: Profit may slip 15% YoY; GST destocking to hit revenue

Nestle Q2 preview: Brokerages tracked by Business Standard estimate Nestle's net profit to decline around 15 per cent year-on-year (Y-o-Y) on average, to ₹730.2 crore

Nestle Q2 results preview: Fast-moving consumer goods (FMCG) major Nestle is slated to release its second quarter (Q2FY26) results on Thursday, October 16, 2025.

Nestle Q2 results 2025: Profit estimates

Brokerages tracked by Business Standard estimate Nestle's net profit to decline around 15 per cent year-on-year (Y-o-Y) on average, to ₹730.2 crore as compared to ₹857.38 crore. A decline in profit after tax (PAT) is due to an exceptional gain of  ₹179.7 crore in the base quarter relating to the slump sale of the business. 

 

Sequentially, the net profit is expected to rise around 11 per cent from ₹659.2 crore in Q2FY25.

 

Nestle Q2 results 2025: Revenue expectations

The company's revenue for the quarter under review is expected to increase 4 per cent in Q2FY26, on average, to ₹5,320.23 crore as compared to ₹5,104 crore a year ago. On a quarter-on-quarter (Q-o-Q) basis too, the revenue is poised to increase 4 per cent from ₹5,096.2 crore in Q2FY25. 

How will  Nestle fare in Q2FY26? Brokerages decode

Kotak Institutional Equities: The brokerage expects a 425 basis points (bps) impact of trade destocking on domestic revenue growth in Q2, since 85-90 per cent of the company's portfolio (all categories, excluding dairy) has seen a goods and services tax (GST) rate cut. 

 

Analysts estimate 3.7 per cent Y-o-Y revenue growth, led by 3.25 per cent/15 per cent Y-o-Y growth in domestic/exports markets. Q2 revenue is pegged at ₹5,292.2 crore, as compared to ₹5,104 crore a year ago. 

 

Gross margin is likely to contract 100 bps Y-o-Y to 55.6 per cent, impacted by sharp inflation in coffee, cocoa, dairy, and edible oils. Earnings before interest, tax, depreciation, and amortisation (Ebitda) margin is expected to decline by 100 bps Y-o-Y to 21.9 per cent, on account of gross margin contraction. Ebitda is expected to come in at ₹1,157.5 crore, as against ₹1,167.7 crore a year ago. 

 

Motilal Oswal Financial Services: Analysts estimate overall sales growth of 5.3 per cent Y-o-Y, led by 5 per cent growth in domestic sales and 10 per cent growth in exports. While demand recovery is underway, a higher dependency on urban markets may weigh on the company's volumes. 

 

Analysts at Motilal believe the channel destocking due to GST rate cuts might weigh on Nestle's Q2 performance. Gross profit margin contraction of 90 bps Y-o-Y to 55.7 per cent, impacted by high raw material prices (coffee, edible oil). Ebitda margin is expected to contract by 100 bps to 22.2 per cent. 

 

The brokerage expects Ebitda to come in at ₹1,195.5 crore, as compared to ₹1,167.7 crore a year ago. 

 

Emkay Global Financial Services: The brokerage expects domestic sales growth at 5 per cent, with a 2-3 per cent impact on primary sales. Given a higher share of direct distribution, analysts anticipate a relatively lower sales impact for Nestle India. Export revenue is likely to see 5 per cent growth Y-o-Y. Overall revenue growth is likely to be 5 per cent with 2 per cent volume growth.  

 

With price actions in place and select raw material prices remaining elevated, analysts forecast a flat gross margin at 56.5 per cent. Ebitda margin is also likely to be flat Y-o-Y at 23 per cent. However, Ebitda is likely to grow 5 per cent to ₹1,227.6 crore. 

 

Nuvama Institutional Equities: Analysts expect demand trends to continue improving gradually as the urban slowdown is tapering down, and domestic sales are expected to grow 2.5 per cent Y-o-Y, up 5.5 per cent Y-o-Y.

 

The brokerage further expects the channels to restock post-GST cuts, as consumer demand should benefit from lower prices, and replenishment is 

needed. Given the advertising and promotion (A&P) and other services (at 18 per cent GST and now become non-refundable) are small, any material impact on margins/working capital is not expected.

 

Besides, export revenue is likely to grow 5–6 per cent Y-o-Y (up 16 per cent Y-o-Y in  Q1FY26; up 3.1 per cent Y-o-Y in Q2FY25. Consolidated Ebitda shall remain flat Y-o-Y to ₹11,67.1 crore as compared to ₹ 1,167.7 crore a year ago.