Shares of fast-moving consumer giant Nestle India extended losses on Friday after the company’s second-quarter results missed analysts’ expectations.

What Happened: The Maggi maker posted a net profit of ₹899.5 crore in the July to September quarter, a 1% fall from ₹908 crore reported in the same period a year ago. Revenue from operations jumped 1.3% to ₹5,104 crore from ₹5,036 crore in the year-ago period. The company’s total income came in at ₹5,110 crore.

While net profit was marginally above analysts’ estimates, who expected it to fall to around ₹858 crore, revenue missed street estimates of around ₹5,301 crore.

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Brokerage Reactions: HDFC Institutional Research said that Nestle’s results were significantly below our expectations owing to weak domestic volume growth as well as the subdued performance of the export business, which grew 3%.

Domestic volume declined 1.5% vs their expectations of volume growth of 1%-2%. The management partially attributed this underwhelming performance to external factors like weak consumer sentiment, ongoing inflation, and reduced purchasing power.

The brokerage sees this as a temporary setback within a longer-term structural narrative, with the potential for double-digit revenue growth in the medium term. HDFC cut its earnings per share estimate for FY25-26 by 6% to 7%. It had an “add” recommendation for the stock but had decreased its target price to ₹2,600 from ₹2,700 previously.

Nirmal Bang said the company missed its esteems on all fronts including revenue, net profit and EBITDA. Nestle’s total sales grew 1.3% year-on-year whereas the brokerage had expected about 5% growth.

Weaker-than-expected results and a lacklustre near-term outlook have led to a reduction of 6.3% and 5.4% in the company’s earnings per share forecast for FY25 and FY26, respectively, Nirmal Bang added. It maintains a “hold” rating for the stock but has downgraded its target price to ₹2,445.

Price Action: Nestle India was trading 1.19% lower at 2,350.30 on Friday morning.

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