Nestle India announced a 4% increase in net profit, reaching ₹656 crore for the quarter ending in December. Despite this growth, the company failed to meet the estimates projected by analysts, although it boasted higher sales compared to its counterparts, including Britannia, HUL, and Marico, in the packaged foods sector.
The company, renowned for products such as Maggi noodles and KitKat chocolates, attributed its lower-than-expected profits to a one-time service cost of ₹107.3 crore. However, Nestle reported a robust 8.9% growth in domestic sales, amounting to ₹4,583.6 crore for the quarter, driven by pricing strategies, product mix enhancements, and a surge in e-commerce and out-of-home channels.
Despite challenges such as volatile coffee prices and potential impacts on crop production due to rain deficits, Nestle India’s chairman, Suresh Narayanan, highlighted the company’s successful expansion into ‘rurban’ markets, underscoring growth initiatives that saw the addition of 5,300 villages to its direct coverage network during the December quarter, totalling over 196,000 villages.
Comparatively, Nestlé’s performance outshone its competitors, with Nuvama Equities noting an 8.9% growth in domestic sales, while rivals like Britannia and HUL experienced minimal growth or even declines in sales volume during the same period.
Also, Nestle India’s financial year transitioned from a calendar year to the April 1-March 31 cycle. Consequently, the current financial year extends up to March 31, 2024, spanning 15 months from January 1, 2023, to March 31, 2024, encompassing five quarters.
Furthermore, Nestle India’s board approved the sale of its Nestle Business Services division to Purina Pet Care India, a subsidiary of Nestle SA, in a deal valued at ₹79.8 crore.