Q3 Results: Nestle India Beats Slowdown As Profit Surges In September Quarter

Nestle India Ltd.’s quarterly profit rose on expected lines as the maker of Maggi instant noodles and Kitkat chocolate was able to skirt India’s consumption slowdown with double-digit sales growth.

Sales Snapshot

• Total sales grew 9.5 percent.
• Domestic sales growth stood at 10.5 percent.
• Exports fell 7.1 percent due to lower coffee shipments to Turkey.

Lower tax expenses and a tax reversal, from the corporate tax rate cut, also helped aid profitability. Tax expense was lower by Rs 72.5 crore due to a credit from the previous quarter. The company also enjoyed a deferred tax reversal of Rs 19.4 crore.

Another aspect working in favour of Nestle India was its focus on urban markets. Rural India, where the slowdown is much deeper, contributes only 20-25 percent of sales for Nestle, Narayanan had said in August. He had noted that there will be “period of low growths” for the FMCG industry but with “decent single-digit” growth.

Shares of Nestle India closed 1.7 percent lower ahead of the announcements, while the benchmark BSE Sensex closed 0.8 percent down.