Nestle India posted its third quarter earnings on Thursday and recorded Q3 profit at Rs 908.08 crore, up 37.3 per cent as against Rs 661.46 crore during the same period last year, beating estimates. It posted revenue from operations at Rs 5036.82 crore, up 9.5 per cent in comparison to Rs 4601.84 crore during the third quarter of CY23. According to a CNBC TV18 poll, Nestle India was expected to post the Q3 profit at Rs 805 crore and revenue at Rs 5142 crore. The company EBITDA stood at Rs 1225 crore.
Nestle India also said that it has achieved the milestone of crossing Rs 5,000 crore turnover in a quarter and it “continues to deliver double-digit domestic sales growth”. While the FMCG major has recorded a total income of Rs 5070.09 crore during the quarter, the total expenses during the period stood at Rs 3954.49 crore. Total sales at Nestle stood at Rs 5009.5 crore, registering a growth at 9.4 per cent.
The company also declared its second interim dividend of Rs 140 per equity share of Rs 10 each for the year 2023 on the entire issued, subscribed and paid-up share capital of the Company of 9,64,15,716 equity shares of the nominal value of Rs. 10 each.
The Board also approved the sub-division of its shares in the ratio of 1:10. “Sub-division/ split of each equity share of face value of Rs 10 each, fully paid-up into 10 equity shares of face value of Re 1 each, fully paid-up by alteration of Capital Clause of the Memorandum of Association of the Company, subject to the approval of the members of the Company to be sought by means of Postal Ballot,” it said.
Nestle’s most favoured product categories
The prepared dishes and cooking aids category showed continued growth momentum, driven by combination of market visibility, impactful media campaigns and targeted consumer engagement initiatives aided by innovation especially for Rurban markets. Meanwhile, milk products and nutrition segment delivered double-digit growth. The brand launched Nestlé a+ Masala Millet and Milkmaid and Peptamen continued to receive positive consumer response, it said. In the confectionery category, all key products registered strong growths led by Kitkat and supported by Munch. In the beverages category, strong growth was recorded across Nescafe portfolio with all key brands – Nescafé Classic, Nescafé Sunrise and Nescafé Gold registering double-digit growths. In the petcare business, Felix Wet Cat food continued to receive positive feedback from trade and cat parents.
“I am pleased to share that we have, yet again, delivered consistent performance almost across all major brands. Domestic sales grew double digit, on account of mix, volume and price. Key brands continued to perform well, led by Kitkat, Nescafe Classic, Nescafe Sunrise, supported by Munch and Milkmaid. We are investing towards building our brand equity and have made strong and significant investments across all product groups. We crossed Rs 5,000 crore turnover, which has been our first in any quarter in the history of the Company and a landmark for us,” said Suresh Narayanan, Chairman and Managing Director, Nestlé India.
Nestle India’s performance across key channels
While e-commerce contributed to 6.1 per cent of the quarterly sales with continued growth across product groups driven by Quick Commerce, organised trade continued delivering strong double-digit growth, the company said. Meanwhile, Out of Home (OOH) channel registered strong double-digit volume led growth and product transformation led to consistent performance. Further, expanded product offerings across key international markets led to growth. Maggi and Nescafe Sunrise range met with strong demand in both ethnic and mainstream channels.
In terms of market segments, consumer trends and increasing proclivity towards adoption of brands in small towns and large villages has propelled the growth of the company. “Our Rurban strategy remained focussed on deepening our reach in under penetrated small towns and large villages. The power of technology has been instrumental in getting actionable insights through our analytics platform MIDAS. We are piloting NESmitra, our customer ordering app in Rurban markets, that connects retailers to distributors,” Nestle said in a statement.
Going forward, Suresh Narayanan said, “Uneven rain and rain deficit is expected to impact production of maize, sugar, oilseeds and spices that may have an adverse impact on pricing. Coffee continues to be volatile because of the global supply deficit. The weather during the harvest of the Indian Robusta crop may impact production. Upcoming winter weather may impact wheat production. Healthy milk flush is expected in winter which is expected to keep prices stable.”
