Nestle India profit rises by 4.38% to Rs 655.6 crore in Dec quarter

FMCG conglomerate Nestle India on Wednesday reported a 4.38% rise in its net profit to Rs 655.61 crore for the December quarter.

The company, which owns brands such as Maggi, Kitkat and Nescafe, had posted a profit of Rs 628.06 crore in the same period a year ago, according to a regulatory filing.

Nestle India's net sales rose 8.27% to Rs 4,583.63 crore during the period under review as against Rs 4,233.27 crore a year ago.

Its domestic sales grew 8.86% to Rs 4,421.79 crore over Rs 4,061.85 crore in the December quarter of the last fiscal.

Its total expenses in the October-December quarter rose 6.11% to Rs 3,636.94 crore.

However, its exports declined 5.58% to Rs 161.84 crore compared to Rs 171.42 crore a year ago.

The company's revenue from operations climbed 8.07% to Rs 4,600.42 crore. It stood at Rs 4,256.79 crore in the December quarter of the last fiscal.

During the quarter, e-commerce delivered strong growth and contributed 7% of domestic sales. Organised trade also witnessed strong growth backed by festive walk-ins and new product launches.

According to the company, its beverages business witnessed a double-digit growth. It was the largest contributor to growth which was propelled by strong demand for Nescafe.

Its Milk and Nutrition product group posted a double-digit growth. Prepared dishes and cooking aids also maintained creditable growth this quarter. In confectionery, KitKat and Munch were its strong growth drivers.

"All key brands and product groups have contributed to Nestlé India's consistent growth trajectory," Nestle India said in its earnings statement.

The growth was "on the back of pricing and mix growth, with strong growth momentum in e-commerce and out-of-home channels. The quarter was marked by an increase in brand investments across all product groups," Nestle India Chairman and Managing Director Suresh Narayanan said.

"The teams excelled in rolling our shopper resonant activities across our large portfolio in both legacy platforms and the fast-growing 'quick commerce'," it said.

Earlier, Nestle India, which followed the January-December financial year, approved the change of the financial year commencing on April 1 and ending on March 31 of the next year.

"Consequently, as a transitional arrangement, the current financial year of the company will be for a period of 15 months commencing January 1, 2023, and ending March 31, 2024, while the previous financial year was 12 months, from January 1, 2022, to December 31, 2022," it said.

It also added the audited results for the previous financial year are also comparable figures for the 12 months ended December 31, 2023.

Nestle is also expanding its presence in the rural area.

The company expanded direct coverage and added 5,300 villages this quarter, reaching a total of over 196,000 villages, close to 200,000 villages, which was its ambition, Narayanan said.

In 2023, Nestle India's profit was 25.44% higher at Rs 2,998.67 crore. It was Rs 2,390.52 crore a year ago. Similarly, revenue from sales of the company products in 2023 increased 13.3% to Rs 19,021.05 crore.

On the commodity outlook, Nestle India said coffee prices continue to be volatile and are historically high due to limited availability.

The board of the company on Wednesday approved the slump sale of the Nestle Business Services ('NBS') Division to Purina PetCare India, a 100% subsidiary of Nestle SA, for an aggregate consideration of Rs 79.8 crore.

"The transaction shall be effective from July 1, 2024, subject to customary closing conditions," the statement said.

Swiss multinational Nestlé SA is the ultimate holding company of Nestle India, in which it owns 62.76%. It has 100% ownership of Purina Petcare India, which operates in the pet food segment in India.

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