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Systematix Research Report
Nestle India Ltd. had a mixed quarter with a muted volume performance offset by an unexpected improvement in margins. Revenue growth at 13.6% fell short of expectations mainly given pressure on Maggi low unit packs volumes and some slowdown in mega cities and tier two-six markets. While volumes declined 1% YoY, mix contributed ~ 4% and pricing ~10% in our view.
Growth continued to be driven by Nescafe, Milkmaid, Kitkat, Munch and mass and premium variants of Maggi. Gross margins were down 206 basis points to 54.9% given sharp inflation in milk, cereals and grains.
However, Ebitda margins improved 30 bps led by savings of 80 bps in employee expenses and 150 bps in other expenses given lower marketing spends (given lower spends on new products and focus on core brands) and cost control measures (150 bps savings in CY22).
Growth saw a boost from e-commerce acceleration (up 41% in CY22), recovery in out of home channel (up 39%) and opening up of exports in new categories (up 8%).
Other key highlights were the consolidation of petcare business, continued distribution ramp-up in rurban markets and focus on the millets opportunity.
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More Research Reports On Nestle India's Q4 CY22 Results Review
Weak Volume; Cost Control Supports Margin: HDFC Securities
Inline; Volumes Under Pressure: Motilal Oswal
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