The FMCG major reported 1.34% decline in net profit to Rs 587.09 crore on 10.2% increase in net sales to Rs 3,525.41 crore in Q3 September 2020 over Q3 September 2019.
Profit before tax (PBT) rose 12.41% to Rs 786.50 crore in Q3 September 2020 over Q3 September 2019. The result was announced after market hours yesterday, 23 October 2020.
Total tax expense jumped 91% year-on-year (YoY) to Rs 199.41 crore in Q3 September 2020. Tax expense for the quarter ended 30 September 2020 is not comparable. The cumulative effect of lower tax rate made applicable from 1 April 2019 was adjusted fully in quarter ended 30 September 2019. Net profit after tax and earnings per share are also not comparable for the same reason.
The company's total sales and domestic sales both increased by 10.2% driven by volume and mix. Export sales increased by 9.4%. Demand in out of home channel improved through the quarter but continues to be impacted by COVID.
The FMCG major said factories have returned to normal output. The firm has reported double digit growth in key brands, boosted by in-home consumption. Demand in 'Out of Home' channels also improved during the quarter. E-commerce grew by 97%, contributing about 4% of domestic sales.
The company has planned Rs 2600 crore investment over the next three to four years.
Commenting on the results, Suresh Narayanan, Chairman and MD of Nestle India said, "I am pleased to share that we plan to invest Rs 2600 crore (INR 26 Billion) over the next three to four years to augment our existing manufacturing capacities, as well as towards our new under construction 'state of the art' factory in Sanand, Gujarat. The quarter witnessed growth driven by an improved supply situation, as our factories returned to normal output. Boosted by an increase in in‐home consumption, our key brands like Maggi noodles, Maggi Sauces, KitKat, Nestlmunch, NescafClassic & Nescafsunrise witnessed double digit growth. Demand in 'Out of Home' channels improved during the quarter but continues to be impacted due to the overall environment. We continued our strong performance in the e‐commerce channels, which grew by 97% and now contributes about 4% of domestic sales.
The board has declared an interim dividend for 2020 of Rs 135 per equity share, which will be paid on and from 20 November 2020. Shares of Nestle India fell 0.3% at Rs 15,863 on Friday.
Nestle India operates in the Food segment. The firm food business incorporates product groups, which include milk products and nutrition, beverages, prepared dishes and cooking aids, and chocolate and confectionery.
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