Raise Prices or Increase Investments? Choices for Protecting Profits During Cost-Inflation Periods

The quarterly financial results released by Nestlé India on October 15, 2026, raise questions about how to allocate growth budgets in the face of cost pressures. Product sales for the second quarter of the 2026–2027 fiscal year, ending in late September, rose 20.5% year-on-year to 6,782.2 crore rupees, and the company stated that it expanded advertising and marketing expenditures by 46%. The EBITDA margin in the same announcement stood at 23.8%. While it is easy to view this scene—where revenue growth accompanied larger brand investments—as a success formula for increased advertising spending, the published figures alone do not confirm a direct causal relationship between the two changes. Rather, the critical question for management lies elsewhere. Amid volatile raw material prices, the choice is whether to raise prices, maintain investments to secure customers, or overhaul distribution…