Nestle India December quarter profit rises 4% to Rs 656 crore

Nestle India's net profit in fourth quarter rose 4.46 per cent to Rs 656 crore as against Rs 628 crore in the corresponding period a year ago. The profit came in below estimates as analysts were expecting the FMCG firm to report net profit of Rs 743 crore.

The company recorded a one-time charge of Rs 107 crore during the period, it said.

The subdued performance by Nestle India in December quarter came as rural demand for consumer goods remained weak amid rising competition.

Nestle's revenue from operations rose 8.1 per cent to Rs 4,600 crore from Rs 4,257 crore. Its earnings before interest, taxes, depreciation, and amortisation (EBITDA) also known as operating profit rose 12.5 per cent to Rs 1,095 crore compared with Rs 973 crore in the year ago period.

Its operating profit margin improved 94 basis points to 23.80 per cent from 22.86 per cent.

“I am pleased to share that despite external challenges, we have once again delivered a strong performance this quarter. Domestic sales grew by 8.9% on the back of pricing and mix growth, with strong growth momentum in e-commerce and out-of-home channels. The quarter was marked by an increase in brand investments across all product groups. I am also pleased to note that during the year 2023, our total sales grew by over 13.3% and we crossed Rs 19,000 crore mark," Suresh Narayanan, Chairman and Managing Director, Nestlé India said.

“All key brands and product groups have contributed to Nestlé India’s consistent growth trajectory. This quarter, strong demand for Nescafe Classic and Nescafé Sunrise propelled the beverages product group to be our largest contributor to growth. Our beverages business witnessed a double-digit growth and Nescafé gained significant market share. Milk and Nutrition product group posted double-digit growth. Prepared Dishes and Cooking Aids also maintained creditable growth this quarter. Confectionery, one of our strong growth drivers also delivered good growth. The growth across all product groups demonstrates the trust consumers placed in us and the unwavering commitment and dedication of our teams,” Narayanan added

Coffee prices continue to be volatile and are historically high due to limited availability. Healthy milk flush in winter is expected to keep prices stable. Commodities such as wheat and rice are stable as of now. Rain deficit is expected to impact the production of maize, sugar, oil seeds and spices that may impact pricing, Nestle said.

Nestle's board declared third interim dividend of Rs 7 per share amounting to Rs 674.91 crore.

Nestle India shares rose 1 per cent to Rs 2,483 after earnings announcement.