Nestle India to invest Rs 5,000 crore in capacity expansion, new product lines, and sustainability across its factories. CMD Suresh Narayanan highlights growth, premiumisation, and rural outreach. New CMD Manish Tiwary to take over from August 1, 2025.

To meet the growing demand for its products, Nestle India will invest around Rs 5,000 crore in the country in coming years, it said in the Annual Report for 2024-25 released on Tuesday.

“Consistent with the growth in business and operations, the company plans to carry out capital expenditure to increase the capacities, productivity, investment in the new product lines and sustainability initiatives across all its existing factory locations,” the company said in the report.

“…this is estimated at around Rs 5,000 crore in coming years,” it added.

In his last letter to the shareholders as the Chairman and Managing Director of the company, Suresh Narayanan said that the company’s capital expenditure as a percentage of sales has jumped from 1.8% in 2015 to 10% in FY25.

“This not only demonstrates the focus on Indian consumers but also our commitment to manufacture in India and ‘Make in India’ as a theme,” he said.

Narayanan will retire as CMD of the company on July 31. Former Amazon executive Manish Tiwary will replace him on August 1.

The annual report showed that in FY25, the company spent Rs 2,004.4 crore towards capital expenditure, its highest in a decade.

It operates nine factories in the country and is currently setting up the tenth facility in Khordha, Odisha.

The FMCG major said that while the capacity expansion has planned for all categories, the focus will be on foods, chocolates and beverages. For instance, the upcoming Khorda facility will focus solely on the company’s food portfolio – which includes the famous Maggi.

Moreover, the company would continue to expand its premium portfolio. “Premiumisation remains a key growth engine for your company,” it said.

Narayanan said that Nestle India’s revenue grew at a compounded rate of 10.3% since 2015. The corresponding profits from operations grew by 13.5%, during the same period.

“In 2015, many considered us to be solely a MAGGI noodles company. Since then we recalibrated and rejuvenated the portfolio launching over 150+ new products that have contributed to 7% of sales,” he said.

Since 2016, Nestle India has added 1.3 million retail outlets, with the highest gains amongst peers in 2024. Its RUrban strategy, which began in 2019, has increased RUrban distribution touchpoints to 28,240.

“Today we are present in approximately 209,050 villages,” Narayanan said.

Currently, India is the largest Maggi and the second-largest KitKat market for the company globally.

The company’s confectionery business here has tripled in the last ten years. Munch and Milkybar have also doubled their business.

In the distribution channels, Narayanan said that about 40% of the distributors have been associated with the company for over 10 years. Moreover, e-commerce contributes 8.6% to sales, out of which quick commerce accounts for around 45%.

Author Credits- Raghav Aggarwal
FINANCIAL EXPRESS