Nestle India Ltd. reported a profit for the September quarter, meeting street expectations, supported by double-digit sales growth across product groups. Revenue and operating earnings exceeded Bloomberg estimates.
Net profit for the July-September quarter rose to Rs 1,027 crore from Rs 753 crore a year earlier, the maggi maker said in a notification to the exchanges on Thursday. The analysts tracked by Bloomberg had pegged the bottom line at Rs 1,008 crore. Revenue from operations increased to Rs 6,788 crore from Rs 5,644 crore in the year-ago quarter, compared with the estimate of Rs 6,758 crore.
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Nestle India Q2 Results Highlights (YoY)
- Net profit up 36.4% at Rs 1,027 crore versus Rs 753 crore. (Bloomberg estimate: Rs 1,008 crore)
- Revenue up 20.3% at Rs 6,788 crore versus Rs 5,644 crore. (Estimate: Rs 6,758 crore)
- Ebitda up 31.0% at Rs 1,615 crore versus Rs 1,232 crore. (Estimate: Rs 1,574 crore)
- Margin at 23.8% versus 21.8%. (Estimate: 23.3%)
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Quick Commerce Supports E-Commerce Growth
Quick commerce remained an important growth channel for Nestle India's e-commerce business during the quarter. The company pointed to better product availability and assortments tailored to individual platforms as factors supporting the channel.
The company also reported double-digit growth in general trade across town classes, with rural markets leading the expansion. Organised trade recorded strong growth as well.
Domestic sales increased 20.4% to Rs 6,515 crore. Export sales rose to Rs 267 crore from Rs 219 crore a year earlier. Nestle India also expanded its overseas product portfolio, introducing Maggi Masala-e-Magic in Canada and Nescafe Sunrise in five West African markets.
Advertising and marketing expenditure increased 46% during the quarter, while other expenses rose to Rs 1,680 crore from Rs 1,309 crore.
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Inflation Remains A Challenge
Higher food inflation and commodity costs remain a challenge for the company, Chairman and Managing Director Manish Tiwary said. Nestle India is seeking to manage the pressure through product innovation, continued brand investment and improvements in productivity and operating efficiency.
The company's commentary on raw materials points to an uneven cost environment. Coffee and wheat prices were expected to remain range-bound, while sugar and edible oil prices had stabilised at elevated levels. Cocoa prices remained volatile amid weather-related concerns in major growing regions, and milk prices had firmed up seasonally.
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