Nestle India Q1 profit jumps 25% to $90mln, beats estimates

Nestle India, One of the major firms in the Fast-Moving Consumer Goods (FMCG) sector, on Tuesday, released outstanding earnings for the three months ending in March. With total sales increasing by 21.3% to $641.7 million (Rs 4,808 crore), the company reported a YoY increase in profit of 24.7% to $98.3 million (Rs 737 crore). The results of an ET Now survey, which predicted that the profit and sales would be roughly $78.2 million (Rs 588 crore) and $590.2 million (Rs 4,424 crore), respectively, outperformed these figures and except for the extraordinary quarter in 2016, the quarter had the highest growth rate in the previous ten years, according to Suresh Narayanan, Chairman, and Managing Director of Nestle India. A balanced combination of pricing, volume, and product mix across all product categories—including drinks, confections, and out-of-home sales—was credited with the company’s sales increase.

NewsOTG gathered that Narayanan mentioned that the business was beginning to notice a weakening in commodity pricing for items like culinary oils, wheat, and packaging materials. However, due to ongoing demand and volatility, it is anticipated that the price of fresh milk, gasoline, and green coffee will stay stable. Nestle India reported considerable growth in quick commerce through e-commerce channels, and its out-of-home (OOH) business continued to expand quickly in the quarter. With a two-thirds growth rate and high momentum in metro and megacities, Nestle’s prolonged growth path in RURBAN (a blend of rural and urban markets) was also accelerated. Strong, secular, and sustained rural growth with volume-led growth gave Nestle’s efforts to expand its presence more confidence and vigor.

Nestle India said in April that it would pay a final dividend for 2022 of $1 (Rs 75) per share, as well as an interim dividend of $0.36 (Rs 27) per share, both of which would begin to be paid on May 8, 2023. After the release of the March results, the price of Nestle India’s stock was unchanged at $277.13 (Rs 20,678.65). The company has regularly outperformed with a respectable return of 14% over the past year. The FMCG behemoth’s impressive performance in the March quarter is a credit to its sound business strategy, which has assisted it in navigating the difficult market conditions brought on by the COVID-19 epidemic.
Nestle India has had great growth in a cutthroat market thanks to its capacity to balance pricing, volume, and mix across its product categories. Future prospects for Nestle India appear promising thanks to early indications of a slowdown in commodity pricing and ongoing progress in its main growth markets.