- Nestle's Q4 net profit reached Rs 1,114 crore with revenue up 22.6%
- CEO Manish Tiwary emphasized a focus on volume-led growth over price hikes
- No price increases implemented this quarter despite global cost pressures
Nestle delivered solid fourth quarter earnings, with a substantial beat on all profits, with net profit reaching Rs 1,114 crore while revenue surged 22.6%. Amid this growth, the emerging narrative from the company's leadership is that the focus will remain on volume-led growth.
Speaking to NDTV Profit's Tamanna Inamdar, Nestle's Managing Director and CEO Manish Tiwary stressed on the company's strategy to spear ahead with volume-led growth, while noting that any re-evaluation of pricing will be the last resort.
"We will focus on volume led growth. We put the price at the last that we need to do. We look at efficiency, strategic buying, portfolio and capacity optimisation and then we come at the issue of pricing," Tiwary stated.
Tiwary, while speaking on the raw material cost, noted that while some commodities like coffee and cocoa have seen softening from record highs, other essentials are hardening.
"We saw some softening on cocoa and coffee, and then we saw some hardening on milk and wheat. What's added to some of these challenges is the West Asia situation—because of that, packaging material, utilities, these are going up faster. And of course, palm kernel oil is going up," he said.
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Nestle has historically relied on stable pricing to maintain penetration rate, particularly in categories like noodles where urban monthly penetration is just 25%. The company itself had entered the year expecting a pure volume-led trajectory.
Notably, Nestle has not yet effected price hikes in the current quarter, despite the global headwinds that may add cost pressure.
The company reported that the last financial year was one of its best for cost savings, which allowed margins to stay intact at 26.3% despite a 52% increase in advertising and promotion investments.
Furthermore, the company is leveraging high-growth channels like Quick Commerce, where it maintains a 95% fill rate across over 5,500 dark stores, to sustain demand for new premium ranges.
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