FMCG major Nestle India has flagged volatility in input costs amid geopolitical uncertainties but has affirmed its commitment to pursuing volume-led growth in the new fiscal year. The company, known for brands such as Maggi noodles, Nescafe, and KitKat, will focus on expanding consumption, improving penetration, and driving efficiencies, as reported by PTI.
Caution Amid Global Uncertainties
Chairman and Managing Director Manish Tiwary stated that the company remains cautious as global uncertainties, monsoon concerns, and commodity price swings continue to cloud visibility. "Times are volatile. It's a difficult thing for anyone to predict what's going to happen even two months down the line," Tiwary told PTI in an interaction.
While he did not indicate any immediate price hike, Tiwary noted that geopolitical tensions are creating cost pressure through higher raw material prices and rising crude-linked packaging costs. Most FMCG companies have already announced price increases of around 3 to 5 percent in the March quarter due to a 15-20 percent surge in raw material costs, elevated crude prices affecting packaging, and a weaker rupee.
Local Sourcing Not a Full Shield
Nestle India sources over 97 percent of its materials locally and manufactures the bulk of its products in India. However, Tiwary cautioned that local sourcing may not fully insulate the company if inflationary pressures worsen. "Nonetheless, this would still not insulate us from further inflation," he said, depending on how the political situation changes in the Middle East. "So, that is something which we have to be ready for. So, that's a little bit of a yellow flag in the future which we see," he added.
The company plans to continue internally optimizing costs through efficiency measures. Despite the uncertain backdrop, Nestle India saw "the right momentum" in FY26, driven largely by volume growth across businesses. The company also sharply increased advertising investments in the second half of the fiscal year to support its core brands.
Outlook for FY27
When asked about the FY27 outlook, Tiwary said: "We will continue to look at volume, let penetration grow." According to him, Nestle's strategy of investing behind core brands while maintaining disciplined cost management and using technology is delivering results. "Going forward, we continue to stick to our strategy to drive volume-led growth, fuelled by investment behind this brand, and we will continue to be very disciplined in our execution," he said.
Acquisitions and Rural Expansion
Nestle India is also open to acquisitions if suitable opportunities emerge. "This is a very comprehensive portfolio to take our business to the next four to five years. At the same time, there is a team which keeps on looking at new spaces, possibly to see acquisitions," Tiwary said.
The company is stepping up its rural expansion under its 'Rurban' strategy, increasing distribution spokes from 25,000 to 45,000. "I think my rural market, the rural business, will grow much faster than the overall sales," Tiwary said. Nestle India, which is opening its tenth factory in Odisha, will continue investing to support volume-led growth. "So, we will continue to invest. We see that demand in the country," he said.
Financial Performance
Nestle India's total revenue in FY26 stood at Rs 23,194.95 crore, up 14.46 percent year-on-year. Its fourth-quarter profit rose to Rs 1,110.9 crore, while revenue from the sale of products stood at Rs 6,723.75 crore.
