Nestle India profit rises 7% to Rs 746.6 crore in Q1, sales up 3.75% to Rs 4,792.97 cr

New Delhi: FMCG major Nestle India Ltd on Thursday reported an increase of 6.9 per cent in its net profit at Rs 746.60 crore for the quarter that ended June 2024.

The company had posted a net profit of Rs 698.34 crore in the April-June period a year ago, according to a regulatory filing from Nestle India.

Nestle India's revenue from the sale of products was up 3.75 per cent to Rs 4,792.97 crore in the June quarter as against Rs 4,619.50 crore in the corresponding period last fiscal.

The company, which owns popular brands such as Maggi, KitKat and Nescafe faced a challenging environment during the quarter with a lower consumption growth in the market.

"Despite external challenges such as lower consumption growth, concerns about continued food inflation and volatile commodity prices, we have delivered growth across our product groups.

"Almost a fourth of our growth has been mix and volume led, and we hope to strengthen this trend in the coming months," said Nestle India Chairman and Managing Director Suresh Narayanan adding that "5 of our top 12 brands grew double-digit." Nestle India's domestic sales were up 4.24 per cent to Rs 4,608.50 crore in the June quarter, as against Rs 4,420.77 crore in the corresponding period last year.

In the June quarter, Nestle's sales from e-commerce sustained its upward trajectory with double-digit growth, contributing to 7.5 per cent of domestic sales.

It had strong growth in quick commerce, driven by brands such as Kitkat, Nescafe, Maggi Masala-ae-Magic, Milkmaid and RTD (Ready to Drink). Growth was aided by new user acquisition and targeted digital communication across touchpoints," said Nestle in an earning statement.

While in the organised trade channels, sales "grew in double-digits, led by value-added noodles, beverages and overall premiumisation," and its Out of Home segment also had a "strong growth momentum," it said.

In the June quarter, prepared dishes and cooking aids maintained its growth momentum, with innovations contributing to 30 per cent of the growth in the quarter.

KitKat delivered double-digit growth and its milk products and nutrition portfolio also maintained growth.

However, Nestle India's exports were down 7.17 per cent in the June quarter to Rs 184.47 crore. It introduced new SKUs to markets in the USA, Canada, Middle East and North Africa.

Its total expenses in the June quarter were up 2.7 per cent to Rs 3,844.01 crore.

Nestle India's revenue from operations, which includes other operating revenue, was at Rs 4,813.95 crore, up 3.33 per cent as against 4,658.53 crore in the previous June quarter.

Total income of Nestle India was up 3.64 per cent to Rs 4,853.07 crore.

Nestle India as per its Rurban strategy continued focus on building 'distribution infrastructure' and added over 800 new distribution touchpoints. With this, its total village coverage has increased by 5,000 taking it to 2.05 lakh villages.

Over the outlook, Nestle India said commodity prices are seeing unprecedented headwinds in coffee and cocoa with all-time high prices and an ongoing price rally.

"Cereals and grains are going through a structural cost increase backed by MSP. There is relative stability in milk prices, packaging and edible oils," it said.

This is the first quarter result of Nestle after it changed the financial year commencing on April 1 and ending on March 31 of the next year. Earlier, Nestle India followed the January-December financial year.

Shares of Nestle India on Thursday were trading at Rs 2,462.20 apiece in afternoon trade on BSE, down 3.21 per cent from its previous close.