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Informist, Tuesday, Feb. 4, 2025

 

--Nestle India: Food inflation continues to hurt consumption 
--Nestle India: High prices persist on select agri-commodities 
--Nestle India Apr-Dec domestic volumes at 411,000 tn, unchanged on year 
 

MUMBAI – Nestle India Ltd.'s domestic volume growth for the first nine months of the financial year 2024-25 (Apr-Mar) remained unchanged on year at 411,000 tonnes, the company said Tuesday in its investor presentation, ahead of its post-earnings conference call with analysts. 

 

The company's volume growth failed to see any uptick between April and December in a period marred by sticky food inflation. Higher food prices has also caused a divergence in India's consumption growth, with India Inc. reporting growth in rural areas, while urban areas lagged.

 

Nestle India, which reported its December quarter earnings last week, said in its investor presentation that food inflation continues to hurt consumption. "While headline inflation is moderating, high prices persist on select agri commodities," Nestle India said.

 

In India, food inflation during Apr-Dec quickened to 8.4% in FY25 from 7.5% a year ago, primarily driven by a few items such as vegetables and pulses, as per the Economic Survey. The survey blamed the rise in food inflation on supply chain disruptions and adverse weather conditions.

 

Nestle India said it faced 'unprecedented' commodity inflation. As per data shared in its presentation, prices of milk went up 20?tween 2016 and 2024. In the same period, prices of coffee, edible oils, wheat, and packaging increased 13%, 11%, 10%, and 13%, respectively.

 

The fast-moving consumer goods company reported a net profit of INR 6.96 billion for the December quarter on a revenue of INR 47.80 billion. The growth of Nestle India's top line for the December quarter was the slowest for the period since 2015, hit by slower domestic sales. The FMCG company blamed the tepid growth on food inflation and moderation in urban consumption even as rural consumption recovers gradually.

 

Growth in urban areas has been in the slow lane for the past two quarters owing to inflationary stress. To revive this, the central government in the Budget presentation last week proposed to revise the personal income tax slabs to exempt those earning up to INR 1.2 million per annum from paying any income tax. "We see announcements of a tax-slab revision and rebates under the new tax regime aiding in boosting overall consumption growth. Savings per taxpayer are likely to be INR 2,500-INR 9,150 per month. Given the quantum benefit, we may see consumers opting for discretionary/big-ticket items," Emkay Global said in a report.

 

At 1426 IST, shares of Nestle India traded at INR 2,295.55 on the National Stock Exchange, down 0.9%.  End

 

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

 

Reported by Anand JC

Edited by Rajeev Pai

 

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