 "Nestle India net up 8.6% at Rs 986 cr in Q2 as demand remains a challenge")
Fast moving consumer goods (FMCG) major Nestle India reported an 8.6 per cent rise in its net profit to Rs 986.4 crore in the second quarter of financial year 2025 (Q2FY25), a period which was marked by muted consumer demand and high commodity prices. The company had reported a net profit of Rs 908.1 crore in the same period last year.
“Despite a challenging external environment with muted consumer demand and high commodity prices, especially for coffee and cocoa, we remained resilient in our pursuit to deliver growth. This quarter, five of our top 12 brands grew at double-digit,” Suresh Narayanan, chairman and managing director, Nestle India, said in an earnings release.
However, the firm’s consolidated net profit fell 0.9 per cent to Rs 899 crore in the September quarter.
The maker of Kitkat chocolates and Nescafe coffee reported a marginal 1.3 per cent uptick in net sales to Rs 5,074.8 crore from Rs 5,009.5 crore in the year ago period. Its profit before interest, depreciation and tax (PBIDT) fell 6.6 per cent to Rs 1,174.6 core from Rs 1,258.1 crore in the same period last year.
The company also announced the introduction of Cerelac variants with no refined sugar.
“This was initiated three years ago and has culminated this year. The expanded Cerelac range in India will now consist of 21 variants, of which 14 variants will have no refined sugar. Of these 14 variants, seven will be available by the end of November 2024 and the balance will be introduced in the coming weeks,” the company stated.
This comes amid growing concerns about sugar levels in packaged food products. Earlier this year, Swiss NGO Public Eye had alleged that Nestle was adding sugar and honey to its infant milk and cereal range sold in low and middle income countries.
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Meanwhile, the company’s beverages business posted high double-digit growth, backed by strong performance across all Nescafe brands, “which can be attributed to category recruitment and premiumisation of coffee,” the company said.
Milkmaid, Masala-ae-magic, and the toddlers’ range also reported a high double-digit growth, while Kitkat and the petcare business registered a high single-digit growth.
“However, some key brands witnessed pressure due to softer consumer demand and we focus on them and have in place robust action plans. It is heartening to note that in the last nine months, 65 per cent of our top 12 brands including Maggi noodles showed positive volume growth,” Narayanan added in the release.
Channels like e-commerce maintained their momentum and delivered a 30 per cent growth, led primarily by quick commerce. E-commerce contributed to 8.3 per cent of the company’s overall sales in the second quarter -- highest in the last seven quarters.
In its commodity outlook, the company said that commodity prices, especially those of coffee and cocoa remain elevated. “Prices of cereals and edible oils are also accentuated with recent developments. There is relative stability in milk prices and packaging so far,” it added.
Board approves Manish Tiwary's appointment as MD
Nestle India’s board of directors on Thursday approved the appointment of Manish Tiwary as the managing director from August 1, 2025, following Suresh Narayanan’s retirement.
“The board of directors has decided that Manish Tiwary will commence his role at Nestlé India as managing director (Designate) starting February 1, 2025, taking on full responsibilities as managing director from August 1, 2025,” the company stated in a release.