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Packaged foods major Nestlé India reported a 26.8 per cent increase in net profit to Rs 934 crore in the quarter ended 31 March 2024, beating analyst estimates.
According to analysts tracked by Bloomberg, the net profit estimate for Nestlé India was Rs 837.9 crore. The company had reported a net profit of Rs 737 crore in the year-ago period.
“In the financial year ended March 31, 2024, confectionery delivered a strong performance, fuelled by KitKat, making India the second-largest market for the brand globally. Our beverage business recorded robust performance. Milk products and nutrition witnessed strong growth despite inflationary pressures. Prepared dishes and cooking aids registered strong growth across the portfolio, led by Maggi Noodles and Maggi Masala-ae-Magic, with India emerging as the largest market worldwide for Maggi,” the company said in an earnings release.
The maker of Cerelac and Maggi Noodles reported a 9.3 per cent rise in net sales to Rs 5,254 crore from Rs 4,808 crore in the year-ago period. Its profit before interest, depreciation, and tax rose 22.7 per cent to Rs 1,386 crore from the year-ago period.
“We have delivered double-digit growth, despite challenges posed by rising food inflation and volatile commodity prices. We have witnessed strong growth momentum across our product portfolio led by a combination of pricing and mix,” said Suresh Narayanan, chairman and managing director of Nestlé India.
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“Our domestic sales crossed ₹5,000 crore this quarter, a notable milestone for us,” he added.
The company’s out-of-home business reported strong growth, and e-commerce sustained its upward trajectory, contributing to 6.8 per cent of sales. Its exports also delivered good growth, with Maggi Noodles and Sauces witnessing increased demand in key markets like Canada, the US, Australia, New Zealand, and Singapore.
“Nescafé Sunrise continued to gain traction in established markets such as Singapore and Taiwan, while also being exported to Canada for the first time,” the release stated.
In its commodity outlook, the company said that commodity prices are facing unprecedented headwinds in coffee and cocoa with all-time high prices and an ongoing price rally.
“Cereals and grains are undergoing a structural cost increase backed by minimum support price. Milk prices are expected to rise due to the expected harsh summer,” it added.
Nestlé India will now start following the April 1-March 31 financial year. The company’s last financial year was extended to March 31, 2024, spanning 15 months.
The company will be bolstering its premium coffee offering in the country with the launch of Nespresso coffee and machines by the end of the year. The country’s first Nespresso boutique will open in New Delhi before being expanded to other key cities. They will also be sold through e-commerce platforms.
The company also announced that it is entering into a definitive agreement to form a joint venture (JV) with Dr Reddy’s Laboratories to bring innovative nutraceutical brands to consumers in India and other agreed territories. The JV company will be formed with 51 per cent Dr Reddy’s holding and 49 per cent of Nestlé India’s holding. Headquartered in Hyderabad, the company is expected to be operational from the second quarter of 2024-25.
The company's board also recommended a final dividend of Rs 8.50 per equity share, amounting to Rs 819.53 crore for the 15-month period.
