Nestle India Ltd.'s second-quarter revenue rose 15%, meeting estimates, as the maker of KitKat raised prices to cope with higher commodity prices.
Revenue of the maker of Maggi instant noodles and KitKat chocolates—that follows calendar-year financial reporting—increased to Rs 4,658.5 crore in the three months ended June, according to its exchange filing. That compares with the Rs 4,801 crore consensus estimate of analysts tracked by Bloomberg.
Analysts peg the underlying volume growth at 4-5%, lower than their expectation of it being in high-single digit.
Nestle India Q2 CY24 (YoY)
Net profit jumped 37% to Rs 698.3 crore (Bloomberg estimate: Rs 703.8 crore).
Operating profit rose 35% to Rs 1,055.4 crore (Bloomberg estimate: Rs 1,091.6 crore).
Margin was 22.6% versus 19.5%. (Bloomberg estimate: 22.7%).
Domestic sales rose 14.6%.
Total expenses rose 11% to Rs 3,743.2 crore.
The cost of materials consumed jumped 7% to Rs 1,977.5 crore.
Categories like milk products and nutrition and beverages saw a "strong" double-digit growth despite inflationary pressures, the company said. Prepared dishes and cooking aids segment—which houses the Maggi brand—as well as the confectionary segment also reported double-digit growth.
"This is the fifth quarter in a row of double-digit growth across all product groups," Nestle India Chairperson Suresh Narayanan said. He underscored that the domestic sales grew on the back of prudent pricing and supported by mix and volume with targeted brand support.
Key brands continued to perform well, led by KitKat, Nescafe and Maggi.
"We witnessed strong growth across mega cities and metros, robust performance in tier 1 to 6 towns and continued strength in rural markets," said Narayanan.
The e-commerce channel contributed to 6.5% of the quarterly sales and continued the growth momentum driven by quick commerce.
Commodities like edible oils, wheat and packaging materials have been in the lower price range. A reversal of price trend is seen in fuels with prices softening in the second quarter after reaching a higher level towards the end of quarter one. In fresh milk, there has been price stability. Robusta prices are elevated and are expected to remain volatile.
The company also mentioned that it will be extending its current financial year to March 2024 and follow an April-March financial year format.
Shares of Nestle fell as much as 1.86% after the results were declared to a flat benchmark Nifty 50.
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