Volume driven strategy could sustain growth for Nestle, say analysts

Valuations however leave little room for gains on the upside

Nestlé delivered an encouraging performance in the March 2023 quarter. Sales were up 21 per cent year-on-year (YoY) to Rs 4,830 crore (Rs 4,260 crore in the previous quarter) with domestic and export sales up 21.2 per cent and 24.9 per cent YoY respectively while net profit rose 25.8 per cent YoY. However, the gross margins contracted 149 basis points YoY to 53.8 per cent on higher raw material prices, particularly milk and its derivatives, as well as wheat flour and edible oil. The operating profit grew 19.7 per cent YoY to Rs 1,110 crore while the operating profit margins