Nestlé India Limited has delivered a stellar performance in the third quarter of financial year 2025-26, marking its strongest quarterly results with record-breaking sales growth and robust profitability metrics. The company's Board of Directors approved the unaudited financial results for the quarter ended 31st December 2025, showcasing exceptional operational performance across all business segments.

Financial Performance Highlights

The company achieved its highest-ever quarterly turnover with remarkable growth across key financial parameters:

The company's EBITDA margin stood at 21.3% of sales, demonstrating strong operational efficiency. Revenue from operations reached ₹56,670.4 million compared to ₹47,797.3 million in the corresponding quarter of the previous year.

Exceptional Items and Tax Benefits

The quarter's performance was significantly enhanced by exceptional items totaling ₹1,569.5 million credit, comprising multiple components:

• ₹2,023.2 million writeback of income tax provisions from earlier periods following closure of litigation
• ₹350.0 million restructuring cost charge for employee severance compensation
• ₹103.7 million past service cost recognition due to New Labour Codes implementation

The income tax litigation closure resulted in a total positive impact of ₹3,120.4 million, with ₹1,097.2 million classified under tax expense and the balance under exceptional items.

Dividend Declaration and Capital Structure

The Board declared an interim dividend of ₹7 per equity share for financial year 2025-26, amounting to ₹13,498.2 million. The dividend will be paid from 26th February 2026 to shareholders on record as of 6th February 2026.

Leadership Appointments and Organizational Changes

The company announced significant leadership transitions to strengthen its management structure:

Key Appointments:

• Mr. Edouard Dominique Jean Mac Nab appointed as Additional Director and Executive Director – Finance & Control and CFO effective 1st March 2026 for five years
• Mr. Jagdeep Singh Marahar to be appointed as Executive Director – Technical effective 1st June 2026
• Mr. Mandeep Singh Chhatwal appointed as Non-Executive Director effective 1st January 2026

Mr. Edouard Mac Nab brings over 25 years of international finance leadership experience and currently serves as Head of Finance & Control of Nestlé Canada. He will succeed Ms. Svetlana Boldina, who will transition to a new assignment with a Nestlé Affiliate.

Strategic Renewable Energy Investments

The Board approved investments in renewable energy infrastructure through partnerships with leading energy companies:

These investments align with the company's sustainability objectives and aim to secure cost-effective green energy for manufacturing operations.

Business Performance Across Segments

Chairman and Managing Director Manish Tiwary highlighted the broad-based growth across all product groups, with three out of four categories achieving robust double-digit growth. The performance was driven by strategic investments in capacity building, brand development, and increased consumer-focused advertising spending, which grew 42% year-on-year.

The company achieved its highest absolute and percentage reach gain in a single year, led by strong rural market expansion while maintaining best-in-class urban performance. All business channels, including General Trade, E-Commerce, and Out-of-Home segments, recorded strong double-digit growth during the quarter.

Nestlé India Limited has secured a decisive legal victory in a prolonged income tax dispute, with the Supreme Court of India dismissing appeals filed by the Income Tax authority regarding general licensing fees spanning over a decade. The company announced this development through a regulatory filing dated January 21, 2025, providing closure to litigation involving substantial financial implications.

Supreme Court Ruling Details

The Supreme Court's order dated January 13, 2025, which was received by the company on January 21, 2025, dismissed the Income Tax authority's appeals as withdrawn. This ruling represents the culmination of a multi-tiered legal battle that had previously seen favorable outcomes for Nestlé India at lower court levels.

Background of the Litigation

The dispute centered on the Income Tax authority's disallowance of general licensing fees paid by Nestlé India during the specified financial years. Tax authorities had issued various orders contending that the payments made during these periods were excessive and unreasonable, leading to disallowances that formed the basis of the contested assessments.

The company had consistently challenged these orders through the appropriate legal channels, maintaining its position regarding the legitimacy and reasonableness of the licensing fee payments. The matter progressed through multiple levels of the judicial system before reaching its final resolution.

Legal Journey Through Courts

The litigation followed a structured path through India's judicial hierarchy:

• Initial Stage: Income Tax authority issued disallowance orders
• Company Response: Nestlé India filed appeals against the orders
• High Court Level: Delhi High Court decided in favor of the company
• Supreme Court Appeal: Income Tax authority challenged the High Court decision
• Final Resolution: Supreme Court dismissed the authority's appeals

Regulatory Compliance and Disclosure

Nestlé India's announcement was made in compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, specifically addressing updates on material litigation. The company referenced its previous disclosure dated August 14, 2023, and subsequent quarterly filings that had kept stakeholders informed about the ongoing litigation status.

The disclosure follows the prescribed format for material litigation updates, ensuring transparency regarding developments that could impact the company's financial position. This regulatory filing demonstrates the company's commitment to maintaining proper corporate governance standards and keeping investors informed about significant legal developments.

Financial and Strategic Implications

With the Supreme Court's dismissal of the Income Tax authority's appeals, Nestlé India has successfully defended its position on general licensing fee payments totaling ₹101.21 crores across the disputed financial years. This resolution eliminates a significant contingent liability and provides certainty regarding the company's tax obligations for the periods in question.

The favorable outcome reinforces the company's tax compliance practices and validates its approach to licensing fee arrangements during the contested years. This legal victory concludes a lengthy dispute that had persisted through multiple levels of India's judicial system, providing definitive closure on the matter.