Nestle posts Rs 231-cr profit, sales surge 16.7%

Nestle India posted Rs 230.8 crore net profit in the first quarter of FY17, compared to a Rs 64.4 crore net loss during the year-ago period. Net sales surged 16.7 per cent due to a lower base, impacted by the Maggi crisis, to Rs 2,087 crore from Rs 1,776 crore on a year on year (y-o-y) basis. Last year its sales remained grossly below normal due the ban on sale of Maggi noodles and is yet to fully recover.

Its sales this quarter, while has outperformed expectations of analyst firms such as Edelweiss Securities, its bottom line remained below expectations. Edelweiss estimated it's revenue and profit after tax to stay at Rs 2,006 crore and Rs 255.7 crore respectively.

"We expect Nestle to revert to sales growth from this quarter. Growth will also look optically better because the Maggi ban happened in the base quarter in June. Other expenditures would remain high because of increased advertising and promotional spends done by the company and lower operating leverage," it said.

Recovery on the financial front has been observed in the past few quarters and Maggi made a re-entry into the market in November. "The brand has indeed shown resilience and consumer trust in its comeback. To harness growth opportunities across all our categories, we have unleashed significant innovation & renovation efforts by launching 25 new products in the past couple of months. These launches and more to follow in due course of time, will contribute to the future growth of Nestle India," Suresh Narayanan, chairman and managing director said.