Nestle India Shares in Focus as Board Plans Bonus Issue

On Friday, Nestle India share price surged 1.6 percent in opening trade on NSE, touching a day’s high price of Rs. 2,356.60 on NSE. The exchange filings revealed that the board is looking to consider its first-ever bonus share issue in a meeting scheduled on June 26, 2025, aiming to improve shareholder value and market liquidity. This bonus share decision is planned after more than 25 years, with the last bonus issue being done in 1996. 

The company's FY25 financial performance, where it reported a consolidated net profit of Rs. 3,208 crore despite facing inflationary pressures and fluctuating demand patterns. The FY25 full-year revenue declined by 17.19 percent to Rs. 20,202 crore from the previous year. Management has outlined a strategy for future growth, prioritising capital expenditure that represents around 10 percent of sales.

The company is establishing its tenth manufacturing facility in Sanand, Gujarat, focusing on confectionery and prepared dishes to strengthen its Make in India initiative commitment. To counter continuous inflation in coffee, cocoa, and edible oils, the company had said that there will be minimal price hikes while avoiding volume decline. Commodity outlook indicates consistent coffee prices, higher cocoa prices despite recent corrections, stable edible oil rates, and rising milk prices during the summer season.

Demand recovery remains uneven, with urban markets experiencing moderation while rural areas show gradual improvement. The company's 'RUrban' strategy expanded distribution to 2,09,050 villages through 28,240 touchpoints, helping offset urban demand softness. Seasonal variations continue to impact product categories differently. Beverages achieved double-digit growth, confectionery grew at high single digits, which is led by KitKat, and petcare division delivered better performance. Prepared dishes like Maggi returned to volume growth after efforts into innovating the product.

Competition is rising for Nestle’s distributors, who face disruption from quick-commerce platforms. The quick commerce formed 8.5 percent of domestic sales for FY25. The company maintains market leadership through premiumisation like Nescafé Roastery, premium KitKat variants, and other products. Since 2015, the company diversified by launching over 150 products that now contribute around 7 percent to sales. As per sources, the marketing investments shifted toward digital campaigns despite a 25% cut in overall advertisement and promotional spends. The company also navigates competition by expanding its footprint in countries like the United States and the United Arab Emirates from Nestle India.