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Informist, Thursday, Jul 25, 2024

 

--Nestle India: E-commerce segment grew in double digits in Apr-Jun 
--Nestle India: Beverages ops grew in double digits in Apr-Jun 
--Nestle India: Nescafe gained market share in Apr-Jun 
--Nestle India: Profit from operations at 21.3% of sales in Apr-Jun 
--Nestle India Apr-Jun exports 1.84 bln rupees vs 1.99 bln yr ago 
--Nestle India Apr-Jun domestic sales 46.09 bln rupees vs 44.21 bln 
--Nestle India Apr-Jun revenue 48.14 bln rupees vs 46.59 bln 
--Nestle India Apr-Jun net profit 7.47 bln rupees vs 6.98 bln 
--Nestle India Apr-Jun revenue 48.14 bln rupees 
--Analysts saw Nestle India Apr-Jun net profit 8.02 bln rupees 
--Nestle India Apr-Jun net profit 7.47 bln rupees

 

By Anshul Choudhary

 

MUMBAI – A slight decline in exports led to Nestle India Ltd's net profit and sales for the June quarter falling short of the Street's expectations. The company said it faced challenges due to lower consumption growth, extreme weather conditions, and volatile commodity prices. 

 

The company posted a net profit of 7.47 bln rupees for Apr-Jun, up nearly 7% on year, driven by domestic sales. This was lower than the expectation of 8.02 bln rupees. At the same time, revenue for the quarter rose 3% to 48.14 bln rupees, lower than the expectation of 50.58 bln rupees. The revenue number includes other operating income. Nestle India's domestic volumes grew 1% on year in Apr-Jun, lower than expectations of 4-6% growth, CNBC-TV18 reported, citing sources.

 

Sequentially, the company's net profit fell over 20% and revenue declined nearly 9%. The company's profit from operations was at 21.3% of sales in Apr-Jun, lower than 22% of sales in Jan-Mar.

 

High commodity prices were a part of the reason for the muted earnings. "Commodity prices are seeing unprecedented headwinds in coffee and cocoa, with all-time high prices and an ongoing price rally," the company said. Among others, prices pertaining to milk, packaging, and edible oils were stable. Overall, the company's expenses rose nearly 3% to 38.44 bln rupees. 

 

Investors weren't happy with Nestle India's quarterly earnings, as they sold the stock post the announcement of the results. At 1248 IST, shares of the company were down 3.1% at 2462.65 rupees on the National Stock Exchange.

 

The company's sales growth during the quarter was led by its revenue from India, which was up 4% on year at 46.09 bln rupees. However, this was lower than analysts' expectation of high-single-digit sales growth. Exports declined 7% on year to 1.84 bln rupees, further hurting sales growth.

 

E-commerce platforms accounted for 7.5% of the sales during the quarter, and rose in double digits, the company said. Its sales through out-of-home business witnessed headwinds due to extreme weather conditions in India, but managed to report growth.

 

Nestle India's prepared dishes and cooking aids products, and milk products and nutrition portfolio witnessed growth during the quarter. Within its confectionery products, Kitkat grew in double digits, the company said.

 

The company's coffee brand Nescafe registered double-digit growth during the quarter despite a scorching summer season in India, Nestle India said. This was driven by double-digit growth in Nescafe Classic, while Nescafe Sunrise and Nescafe Gold also witnessed growth. Nescafe continues to maintain its leadership position in the market and even managed to gain market share during the quarter, the company said.