Nestle India was trading in the red on Thursday ahead of its second quarter results. After the company missed street expectations in the last quarter, here’s what analysts are looking forward to for the July to September period.

What Happened: Motilal Oswal expects a sales growth of 6% to ₹5,345 crore, showing a continued growth momentum, adjusted profit is expected it improve by about 12%. The brokerage sees a 50 basis-point rise in gross margin and a 30 basis-point increase in EBITDA margin year on year.

Axis Securities expects revenue to grow at 6%, largely led by price hikes. However, it sees the company’s profit declining by 6.2% on account of exceptional items, adjusted profit after tax is seen rising by 7%, the broker said.

EBITDA margin is expected to decline year on year on account of inflation in coffee and cocoa prices, Axis added. It expects Nestle to lead the overall revenue growth for the sector. The Maggi maker is one of Axis’ top picks in the industry.

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HDFC Securities forecast a revenue of ₹5,253 crore for the company and sees adjusted PAT increasing by 3.1%. Increased competition in infant nutrition, the removal of price tiers for Maggi bundle packs and a shift to cheaper options in the coffee business is expected to weigh on revenue growth, HDFC said. Inflationary pressure in coffee and cocoa along with weak revenue growth is likely hamper operating margin, it added.

Nirmal Bang expects Nestle to achieve 5% year-on-year revenue growth in the quarter, driven by an estimated 4% increase in volume. It projects gross margin to rise by 100 basis points year on year and remain flat quarter on quarter, largely due to lower milk prices. It expects EBITDA margin to decrease by 40 basis points year-on-year to 24% and EBITDA and adjusted profit after tax to grow 3.3% and 2.6% year on year, respectively.

On average, brokerages expect the Indian arm of the Swiss fast-moving consumer goods giant to report a revenue of ₹5,301 crore and a profit of ₹858 crore for the July to September period. The management’s commentary on outlook for demand in rural versus urban areas, competitive dynamics and trends in raw materials is likely to be in focus.

Price Action: Shares of Nestle India were trading 0.5% lower ₹2,448.65 on Thursday morning.

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