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Informist, Thursday, Jul. 24, 2025

 

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--Nestle India Apr-Jun net profit INR 6.59 bln
--Analysts saw Nestle India Apr-Jun net profit at INR 7.40 bln
--Nestle India Apr-Jun net profit INR 6.59 bln vs INR 7.47 bln year ago
--Nestle India Apr-Jun revenue INR 50.96 bln vs INR 48.14 bln year ago
--Nestle India appoints Manish Tiwary as Chairman, MD
--Nestle India: Suresh Narayanan to relinquish Chairman, MD post Jul 31
--Nestle India Apr-Jun domestic sales INR 48.60 bln vs INR 46.09 bln yr ago
--Nestle India Apr-Jun export sales INR 2.14 bln vs INR 1.84 bln year ago
--Nestle India Apr-Jun EBITDA 21.7% of revenue
--Nestle India: Cocoa, edible oil prices stabilised, remain rangebound
--Nestle India: Milk prices seen falling with onset of favorable monsoon
--Nestle India: Milk prices seen falling with onset of flush season
--Nestle India: Seven out of 12 top brands grew in double digits in Apr-Jun
--Nestle India:Saw higher consumption prices across commodity portfolio in Q1
--Nestle India: Operations costs up on major mfg expansion in last 7-8 mos
 

 

By Anand JC

 

NEW DELHI – Nestle India Ltd.'s net profit fell for the second consecutive quarter, this time in double-digits, dragged down by a sharp uptick in raw material costs. Shares of the company fell soon after the company disclosed its results for Apr-Jun, extending losses on the National Stock Exchange to trade over 5% lower at INR 2,328 at 1154 IST.

 

Nestle India reported a net profit of INR 6.6 billion for the June quarter, down nearly 12% on year. Analysts saw the company's bottom line at INR 7.4 billion.

 

The Nescafe maker's revenue from operations for the quarter rose almost 6% on year INR 51 billion, in line with consensus estimate of INR 50.9 billion. Of this, Nestle India's domestic sales was INR 48.6 billion, up over 5% from the quarter a year ago. Sales from exports grew to INR 2.1 billion, up almost 16% from INR 1.8 billion in the base quarter. The high double-digit growth in exports was driven by the foods, coffee, instant tea, and breakfast cereals segments despite rise in commodity prices, the company said in a release. 

 

Nestle India's outgoing Chairman and Managing Director Suresh Narayanan said the quarter was impacted by elevated consumption prices across its commodity portfolio. "We witnessed higher operations costs as a result of significant expansion in manufacturing in the last seven to eight months," he added. Narayanan has stepped down from the position and will be replaced by Manish Tiwary starting Aug. 1.

 

EXPENSES
Nestle India felt the heat of a sharp increase in overall expenses in the June quarter. Total expenses incurred by the FMCG major during the quarter stood at INR 42 billion, up over 9% on year. This is the biggest growth in total expenses since they grew 11% in the June quarter of 2023-24 (Apr-Mar).

 

Cost of materials consumed constitutes the largest chunk of Nestle India's total expenses, at around 51%. Input costs during the quarter soared nearly 11% on year to INR 21.5 billion -- the highest since the March quarter of FY23.

 

Other expenses grew 4% on year to INR 11.8 billion while employee benefits expenses grew 2% on year to INR 5.2 billion. Depreciation and amortisation costs rose 39% on year to INR 1.6 billion, but formed a relatively smaller part of the total expenses.

 

Nestle India's tax expense for the reporting quarter fell 8% year-on-year to INR 2.4 billion. Its finance costs totalling INR 469 million for the quarter nearly doubled on year. Narayanan attributed this to the company's borrowing from commercial banks to fund temporary operational cash-flow requirements. 

 

Nestle India reported earnings before interest, tax, depreciation, and amortisation margin of 21.7% for the June quarter.

 

SEGMENTAL PERFORMANCE
In his statement, Narayanan said prepared dishes and cooking aids, powdered and liquid beverages, and confectionery segments bounced back to volume-led growth during the June quarter. Seven out of its top 12 brands reported a double-digit growth in Apr-Jun.

 

In the powdered and liquid beverages category, Nescafe gained additional market share to solidify its leadership position, the company said. Growth was driven by cold coffee sales during the months of summer. This segment contributed around 14% to Nestle India's total sales in FY25.

 

The high double-digit growth in confectionery category was driven by robust underlying growth, the company said. Kitkat gained market share and achieved double-digit growth, emerging as the biggest growth driver for the segment. "Growth (was) driven by rural acceleration, premiumisation, and increased in-home penetration, supported by quick commerce," Nestle said. The category contributed nearly 17% to Nestle India's overall sales last fiscal.

 

"Milk products and nutrition category had mixed growth performance with certain segments showing growth, while a few had muted performance," Nestle India said. This segment is the largest contributor to Nestle India's overall sales, and it formed nearly 38% of its total top line in FY25. Nestle India's breakfast cereals business reported a high double-digit growth during the June quarter.

 

E-commerce contributed to 12.5% of its total domestic sales, driven by new launches and quick commerce business.

 

The prepared dishes and cooking aids segment reported a volume growth during the reporting quarter, led by a double-digit growth in sales of Maggi Noodles. This segment contributed over 31% to Nestle India's total sales in FY25. The company said it saw positive signs of uptick in consumption trends in the category during the quarter. "Both quick commerce as well RUrban contributed to the overall performance of the portfolio," the company said.

 

"RUrban" is the company's strategy to expand its reach in India's smaller towns and villages. "Significant rise in demand over recent quarters has led to growth in urban markets," the company said. "RUrban markets too have demonstrated positive growth, signalling a favourable shift in market dynamics and contributing to overall market resilience," it added. Nestle India saw widespread growth across categories in organised trade. This was partly due to the expansion of its stores.

 

Going forward, Nestle India expects coffee prices to remain range-bound at current levels, which are low. This is because the upcoming coffee crop in Vietnam appears to be normal, the company said. Similarly, cocoa and edible prices too could remain range-bound and are currently stable. Nestle India expects a fall in milk prices with the onset of a favourable monsoon and flush season.  End

 

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

 

Edited by Nishant Maher

 

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