Nestle Q3 preview: Profit & revenue may rise YoY; gross margin to contract

Nestle Q3 results preview: Brokerages tracked by Business Standard estimate Nestle's net profit to average ₹745.25 crore, compared to ₹713.9 crore a year ago, up 4 per cent year-on-year (Y-o-Y)

Nestle Q3 results preview: Fast-moving consumer goods (FMCG) major Nestle is slated to release its December quarter (Q3FY26) results on Friday, January 30, 2026.

 

Brokerages tracked by Business Standard estimate Nestle's net profit to average ₹745.25 crore, compared to ₹713.9 crore a year ago, up 4 per cent year-on-year (Y-o-Y). However, sequentially, the profit after tax (PAT) is expected to slip 1 per cent from ₹753.2 crore in Q2FY26 due to higher depreciation and finance cost, according to analysts.

 

The company's revenue for the quarter under review is expected to climb 11 per cent in Q3FY26, on average, to ₹5,304.13 crore as compared to ₹4,780 crore a year ago. However, on a quarter-on-quarter (Q-o-Q) basis, the revenue is poised to slip 6 per cent from ₹5,643.6 crore in Q2FY26.

 

Nestle Q3 results expectations:

Kotak Institutional Equities: Analysts estimate 7 per cent/10 per cent tonnage/value growth (domestic) for Nestle on the backdrop of continued volume-led distribution depth momentum in all segments, barring milk products and nutrition. 

 

Exports are likely to grow at 11 per cent Y-o-Y, leading to total revenue growth of 10 per cent Y-o-Y to ₹5,257.8 crore in Q3. Gross margin could contract 140 basis points (bps) Y-o-Y, but increase 70 bps Q-o-Q due to moderating raw material prices, particularly coffee/milk to 55 per cent. 

 

Earnings before interest, tax, depreciation, and amortisation (Ebitda) margin is anticipated to decline by 20 bps Y-o-Y to 22.9 per cent, as gross margin is likely to contract, partly offset by operating leverage. Consolidated Ebitda is expected to grow 9.2 per cent Y-o-Y to ₹1,203.8 crore.   ALSO READ | ITC Q3 preview: Profit may rise 2% YoY; FMCG biz to post healthy growth

 

Motilal Oswal Financial Services: The brokerage expects 12 per cent Y-o-Y consolidated revenue growth to ₹5,354.4 crore. Domestic business is expected to grow 12 per cent, led by volume. The growth is supported by the normalisation of trade post-goods and services tax (GST) implementation. 

 

Gross profit margin is likely to contract 120 bps Y-o-Y to 55.2 per cent, but it has expanded 90bp Q-o-Q from 54.3 per cent in Q2FY26, due to the moderation in raw material prices. Consolidated gross profit is estimated at ₹2,955.6 crore in Q3. Ebitda is pegged at ₹1,237 crore in Q3, and Ebitda margin is expected to contract by 40 bps Y-o-Y to 23.1 per cent.  

 

Emkay Global Financial Services: Analysts see domestic sales growth at 10 per cent – a trend sustaining since Q2FY26. Such growth will be driven by a high single-digit volume growth. They continue to see Nestle leveraging its urban-centric portfolio in emerging channels. E-commerce is likely to sustain healthy growth momentum. In other channels (general trade and modern trade), a mid-single-digit revenue growth is expected. 

 

The company is likely to sustain faster growth in the rural market, which boasts a high-teens revenue contribution. Emkay's checks indicate sustained thrust on rural markets, while actions are underway for optimising the growth channels. The recent commentary by the new CEO is encouraging – focus is on addressing consumer needs and on driving penetration, which in turn would drive volumes and hence lead to revenue growth. 

 

With expectations of a better sales mix and some comfort on the raw-material price setting, Emkay sees gross margin contraction being contained at 75 bps Y-o-Y and expansion of 130 bps Q-o-Q to 55.5 per cent. Ebitda margin is likely to see a 30 bps contraction Y-o-Y, at 23 per cent, and Ebitda growth of 8 per cent Y-o-Y to ₹11,94.3 crore is expected.  

 

Adjusted PAT is likely to see 6 per cent Y-o-Y growth to ₹738 crore, given the surge in depreciation charge (owing to the recent capacity additions).   ALSO READ | Vedanta Q3 Preview: What to expect from steel major in this quarter?

 

PL Capital: The brokerage anticipates early double-digit sales and volume growth, respectively, on post-GST recovery. Meanwhile, consolidated revenue is forecasted to come in at ₹5,353.3 crore, as compared to ₹4,779.7 crore a year ago. 

 

Analysts see margins as having bottomed out but will remain in negative territory as raw material costs are still high on a Y-o-Y basis. 

 

Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers' discretion is advised.