Nestle India extends rally on stellar June quarter, higher costs may limit upside
Despite this gain, Nestle continues to trade at a trailing price-earnings (P/E) multiple of around 75, which falls within its five-year valuation band of 75-78. However, the stock may remain range bound in the short term. This is because while the June quarter financial numbers were robust year-on-year, operating margin before depreciation and amortisation (EBITDA margin) moderated sequentially, reflecting rising operating costs. Margin pressures could persist in the coming quarters amid higher advertising investments and uncertainty around commodity and pricing trends stemming from the ongoing West Asia conflict.
ET BureauNestle India shares hit a record high on Wednesday following the FMCG major’s stellar June quarter performance.
The company has consistently improved the year-on-year rate of revenue growth over the past few quarters. It improved to 25.2% in the June quarter compared with just over 1% in the September 2024 quarter. It also recorded the highest June quarter EBITDA margin of 24.2% in at least four years. However, it contracted sequentially from 26.3% in the March 2026 quarter owing to a continued rise in the investments in brands and advertising spend. This is despite accelerated operational cost saving measures by the company.
Exports have grown steadily to ₹2,902.2 crore in the June 2026 quarter from ₹1,844.7 crore in the June 2024 quarter driven by stronger international market penetration and product portfolio additions.
The company expects demand momentum to remain healthy, supported by premiumisation, deeper rural penetration, product innovations and continued traction in quick commerce.
