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Nestle India today reported a 10.33% increase in net profit at Rs 271.38 crore during the April-June quarter, backed by lower finance costs. It had reported Rs 245.97 crore of net profit during the corresponding quarter previous fiscal year.
Finance costs have reduced compared to the previous year as the Government had decided to treat all exchange differences on long-term foreign currency borrowings for fixed assets as capital expenditure, effective September 2012, the company said in a statement, on Friday.
Nestle India has reported a 46.9% growth in exports, mainly because of exports to affiliates.
Total net income from operations of the company rose 11.50% to Rs 2222.71 crore during the quarter ended June 30, 2013, as against Rs 1993.40 crore reported during the corresponding quarter previous fiscal year.
Depreciation costs during the quarter under review have increased over the same period last year due to expansion in production capacities over the last year and amortization of capitalised borrowing costs, Nestle India said in a statement. Tax expense has also increased mainly due to the change in income-tax surcharge from 5-10%, effective April 2013, Nestle stated.
Nestle India’s net sales stood at Rs. 2,213.2 crore, up 11.4% during the quarter under review. Net domestic sales have increased by 9.2%, primarily due to growth in net realisation and volume in certain product categories.
During the quarter, its operating profit margin increased 42 bps to 17.55% from 17.97% for the same period last year.
Nestle India’s key business segments such as noodles, coffees, and nutrition have performed well during the quarter. Its premium chocolate brand Alpino was also launched during the quarter.
'I am satisfied that we have yet another quarter of double digit growth with healthy profitability. Given the challenging environment, there is more work to be done in some businesses and I am confident that the team is well aligned and capable of delivering growth consistent with the economic environment,' Nestle India chairman and managing director Antonio Helio Waszyk said in a statement.
During the period, Nestle India’s long-term borrowings have increased due to restatement of outstanding external commercial borrowings (ECB) at the closing exchange rate. However, id has not taken any additional loan from Nestle SA under the ECB route during the April-June quarter.
At present, total amount ECB outstanding stood at USD 192 million (Rs 1134.81 crore) since June 2012. Its annualised cost over the loan period since inception, including interest and unrealised exchange differences, is 19%.
Shares of Nestle closed at Rs 5,447.35 on the Bombay Stock Exchange (BSE), down 2.05%, on Friday.
