FMCG major Nestle India on Thursday posted its fiscal first quarter profit growth of 6.9 per cent to Rs 746.60 crore in comparison to Rs 698.34 crore recorded during the corresponding quarter of FY24. It posted revenue from operations at Rs 4813.95 crore, up 3.3 per cent as against Rs 4658.53 crore during the first quarter of previous financial year. The company EBITDA stood at Rs 1103 crore
The company posted total sales during the quarter at Rs 4793 crore, up 3.8 per cent, with domestic sales growth at 4.2 per cent. Nestle India board also recommended an interim dividend of Rs 2.75 per equity share, declared on July 8, 2024.
Suresh Narayanan, Chairman and Managing Director, Nestlé India, said, “I am pleased to share that despite external challenges such as lower consumption growth, concerns on continued food inflation and volatile commodity prices, we have delivered growth across our product groups. Almost a fourth of our growth has been mix and volume led, and we hope to strengthen this trend in the coming months.”
Nestle India’s Q1 performance across distribution channels
The FMCG major’s e-commerce channel continued to accelerate with strong growth in quick commerce, driven by brands such as Kitkat, Nescafé, Maggi Masala-ae-Magic, Milkmaid and RTD. Growth, it added, was aided by new user acquisition and targeted digital communication across touchpoints. The organized trade grew in double-digit, led by value added noodles, beverages and overall premiumization. Out of Home (OOH) posted strong growth momentum fuelled by portfolio transformation, innovations, penetration and premiumization. Meanwhile, in terms of exports, the company expanded its footprint by introducing new SKUs to markets in the USA, Canada, Middle East and North Africa. “A significant milestone was achieved with the first ever export of breakfast cereals such as Koko Krunch And Nestlé Gold Oats and Corn Flakes,” it added.
Suresh Narayanan said, “E-commerce sustained its upward trajectory, contributing to 7.5 per cent of domestic sales and growing at double digit. The Out-of-Home business continued its growth momentum despite unprecedented headwinds of extreme weather conditions across India. In addition to the successful collaboration with SOCIAL for the plant-based range, we have now launched a Special Korean noodles menu across all SOCIAL outlets pan India for a limited period. We continue our relentless focus on building ‘distribution infrastructure’ as our touchpoints in RUrban geographies have been expanding consistently.”
During the period, Nestle India has added over 800 new distribution touchpoints that includes cash distributors, re-distributors and wholesale hubs. The company has also increased its village coverage by 5,000 taking it to around 2,05,000 villages.
Nestle India’s Q1 performance across product portfolio
For the prepared dishes and cooking aids segment, Nestle India had strong consumer engagements, media campaigns, innovations and enhanced RURBAN penetration that enabled the business to maintain its momentum. Its milk products and nutrition segment recorded growth that was driven by the Milkmaid and toddler range of products. In the confectionery segment, Munch continued to make regional inroads. Nestle India said that category first initiatives were initiated on OTT platforms for Kitkat, while Munch entered a movie partnership. The beverages category witnessed robust performance across all products. “NESCAFÉ Sunrise gained traction in South India. With this strong performance, NESCAFÉ has further solidified its leadership position in the market, gaining market share and achieving significant household penetration gains,” it said. In the petcare business, Felix wet cat food continued to receive positive feedback from trade and cat parents.
Suresh Narayanan said, “I am happy to inform you that 5 of our top 12 brands grew double-digit. Our beverages business stood out, with strong double-digit growth, despite a scorching summer across many parts of India. Strong consumer led activation on ‘Cold opportunity’ helped NESCAFÉ CLASSIC post double-digit growth. In consonance, NESCAFÉ Sunrise, and NESCAFÉ GOLD also delivered strong growth. The launch of NESCAFÉ Roastery has further strengthened our premium coffee portfolio.”
“Prepared Dishes and Cooking Aids too maintained its growth momentum, with innovations contributing to ~30 per cent of the growth in the quarter. Maggi Korean Noodles has been well received by our consumers and Masala-Ae-Magic saw double digit growth. Kitkat delivered double digit growth. We take pride in confectionery being one of the most distributed businesses with highly connected digital brands and a slew of innovations in the pipeline. Milk Products and Nutrition portfolio-maintained growth,” he added.