Tuesday, Nov 29, 2022
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Nestle India Q2 Profit Falls 4% To Rs 515 Crore, Sales Rise 16% To Rs 4,006 Crore

The company, which follows the January-December financial year, had posted a net profit of Rs 538.58 crore in the corresponding period a year ago, Nestle India said in a regulatory filing

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FMCG major Nestle India Ltd on Thursday reported a 4.31 per cent fall in its net profit at Rs 515.34 crore for the second quarter ended June 30, amid inflationary pressures.

The company, which follows the January-December financial year, had posted a net profit of Rs 538.58 crore in the corresponding period a year ago, Nestle India said in a regulatory filing.

However, Nestle India's net sales were up 15.72 per cent to Rs 4,006.86 crore during the period under review, as against Rs 3,462.35 crore a year ago, the company said.

Its total expenses in the April-June quarter were at Rs 3,355.59 crore, up 20.89 per cent, as against Rs 2,775.68 crore in the year-ago period.

Commenting on the results, its Chairman and Managing Director Suresh Narayanan said Nestlé India has continued to deliver sales growth this quarter and breached Rs 4,000 crore revenue mark for the first time.

"Our endeavour this quarter was to secure our engines of growth in this inflationary context and to enable sharp overall business recovery when the pressures abate. The growth is broad-based and while being primarily driven by pricing, has a healthy underlying volume and mix evolution," he said.

Nestle India's domestic sales were up 16.44 per cent to Rs 3,848.44 crore, as against Rs 3,304.97 crore in the April-June quarter of 2021.

Its exports were marginally up 0.66 per cent to Rs 158.42 crore, as against Rs 157.38 crore a year ago.

The company's milk products and nutrition category witnessed double-digit growth across brands. Similarly, the confectionery category led by KitKat and Nestlé Munch performed with strong double-digit growth.

The beverages category also turned in another double-digit growth across channels led by NESCAFÉ and the foods category also continued strong double-digit growth with improved market share in Maggi Noodles.

"We continued to see strong momentum in megacities and metros, as well as strong acceleration across smaller town classes. We are also heartened by a smart uptick in sales in rural markets this quarter which augurs well for a credible momentum in future," said Narayanan.

Meanwhile, Nestle India, also announced its entry into the fast-growing pet-food segment, by acquiring the business from Purina Petcare India, a fellow subsidiary of its Swiss parent firm Nestle SA at a value of Rs 123.5 crore.

According to Narayanan, the pet-food segment has evolved very positively and has an exciting future with pet adoption on the rise post-pandemic.

"Going forward, leveraging Nestlé India's network would further accelerate the growth of Pet Food Business in India and for Nestlé India a promising business would be a part of its portfolio from the last quarter ending 31st December 2022," he said.

For the first half of 2022, Nestle India's net sales were up 12.67 per cent to Rs 7,957.76 crore, as against Rs 7,062.55 crore in the corresponding period of 2021.

While commenting on commodity outlook, Narayanan said early signs of softening in a few commodities like edible oils and packaging materials are witnessed.

"Fresh milk, fuels, grains and green coffee costs are expected to remain firm with the continued increase in demand and volatility," he added.

Shares of Nestle India were trading at Rs 19,120.70 apiece on BSE, up 3.11 per cent from its previous close.

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