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Informist, Friday, Jan. 31, 2025

 

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--Nestle India Oct-Dec net profit INR 6.96 bln 
--Analysts saw Nestle India Oct-Dec net profit INR 7.10 bln 
--Nestle India Oct-Dec net profit INR 6.96 bln vs INR 6.56 bln yr ago 
--Nestle India Oct-Dec revenue INR 47.80 bln vs INR 46.00 bln yr ago 
--Nestle India to pay INR 14.25 per share interim dividend 
--Nestle India Apr-Dec net profit INR 24.29 bln vs INR 22.62 bln yr ago 
--Nestle India Apr-Dec revenue INR 146.98 bln vs INR 142.96 bln yr ago 
--Nestle India Oct-Dec profit from ops at 20.3% of sales 
--Nestle India shares rise more, up 4% now vs 2.9?rlier 
--Nestle India Oct-Dec e-comm ops grew high double digits, was 9.1% of sales 
--Nestle India  out of home ops posted double digit growth in Oct-Dec 
--Nestle India: Urban consumption moderated in Oct-Dec 
--Nestle India Oct-Dec cost of materials 43.8% of sales vs 41.6% year ago 

 

By Anand JC

 

MUMBAI – The growth of Nestle India Ltd.'s top line for the December quarter was the slowest for the period since 2015, hit by slower domestic sales. The fast moving consumer goods company blamed the tepid growth on food inflation and moderation in urban consumption even as the rural areas recover gradually.

 

Nestle India's revenue from operations for the December quarter was INR 47.80 billion, 3.9% higher than a year ago. An Informist poll of 14 brokerages had estimated the revenue at INR 48.10 billion. Domestic sales grew 3.3% on year during the quarter, much slower than the 8.9% growth a year ago.

 

Although exports form less than 5% of Nestle India's overall sales, they grew at a much faster clip than domestic sales. Export sales in the December quarter were INR 1.96 billion, up 21% from the corresponding period a year ago. The export of coffee brands continued to be in double digits, the company said in a press release. The firm saw strong growth in key international markets powered by instant tea and confectionery.

 

Nestle India reported a net profit of INR 6.96 billion for the December quarter, 6% higher on year, but down 29% sequentially. Analysts had expected a bottom line of INR 7.10 billion. 

 

SEGMENTAL GROWTH

Growth in the December quarter was led by Nestle India's powdered and liquid beverages business, posting high double-digit growth. The company's beverages business, led by Nescafe Classic, Nescafe Sunrise, and Nescafe Gold, surpassed revenue of INR 20 billion in the last 12 months, Nestle said. 

 

"This quarter three out of four product groups delivered healthy growth led by a combination of pricing and volume. Key brands continue to perform and this augurs well in a challenging environment," Suresh Narayanan, chairman and managing director of Nestle India, said in a press release.

 

The company expects its manufacturing capacity to witness a "significant" jump with the commissioning of the third confectionery unit in Sanand to manufacture Kitkat. It had pencilled in capital expenditure of INR 58 billion between 2020 and 2025. The double-digit growth of Kitkat during the December quarter helped Nestle India's confectionery business grow in high single digits.

 

Prepared dishes and cooking aids grew in high single digits in the reporting quarter. The company's petcare business saw its highest growth since it was integrated into the Nestle India business in 2022. New products launched by Nestle India since 2015 currently contribute around 7% to its overall sales. 

Nestle India's out-of-home business grew in strong double digits, the company said. Sales through its e-commerce portal grew in high double digits during the final quarter of 2024, contributing 9.1% to its domestic sales. The acceleration of its e-commerce segment was aided by quick commerce, consumer acquisition, festival activation, and premiumisation, the company said.

 

While prices of edible oil have stabilised, commodity prices of coffee, cocoa, cereals, and grains continue to be firm, said Nestle India. Prices of milk and packaging are currently stable.  

 

EXPENDITURE PROFILE

The total expenses incurred by Nestle India in the quarter ended December were INR 38.62 billion, 6% higher compared to a year ago, but down by a similar number sequentially. The cost of materials consumed saw an uptick of 5% on year for the December quarter to INR 20.76 billion. Analysts had expected the inflationary raw material price setting across Nestle India's portfolio to take a toll on its quarterly performance. 

 

Nestle India's employee benefits expense increased 18% on year to INR 4.95 billion. Expenses towards depreciation and amortiasation for the reporting quarter rose to INR 1.33 billion, 22% higher on year. Finance costs, which include interest costs on employee benefits plans, rose 51% to INR 346 million.

 

The company will pay dividend of INR 14.25 per share on Feb. 27, with the record date being set at Feb. 7.

 

Shares of Nestle India, which were trading 3% higher prior to the results being declared, gained 7.7% at its session's peak after the financials were disclosed. At 1301 IST, shares of the blue chip FMCG company were at INR 2,339.95 on the National Stock Exchange, up 5.5%.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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