Nestle's March quarter profit rose 25 per cent to Rs.737 crore year-on-year

FMCG major Nestle India on Tuesday reported that its profit in the March quarter rose 25 per cent to Rs.737 crore year-on-year.

In a filing with the stock exchanges, Nestle India announced that its profit in the first quarter rose to Rs 736.64 crore, as compared to Rs 590.7 crore in the same period a year ago.

The FMCG major’s total sales grew 21.3 per cent in the first quarter ending March to Rs 4,808 crore, as compared to Rs 3,962.84 crore in same period a year ago. Meanwhile, the company’s domestic sales saw a growth of 21.2 per cent in the March quarter to Rs 4,612.73 crore, against Rs 3,806.20 crore in the March quarter of FY22.

The FMCG firm’s profit from operations came at 21.0 per cent of sales at Rs 1,008 crore. Nestle’s earnings per share came at Rs 76.4. The firm’s exports rose 24.91 per cent to Rs 195.67 crore.

The company has announced a dividend of Rs 27 per share.

Nestle India chairman and MD Suresh Narayanan said, “This is the highest growth for the Company in a quarter in the last 10 years (excluding the exceptional quarter in 2016 which was off a low base in 2015).”

“All our product groups delivered double digit growth, a notable feature in these past four quarters in a row. Confectionery led by KITKAT, and MUNCH posted a strong growth, supported by consumer led campaigns, innovation and engagement,” Narayanan said. He added that beverages turned in another quarter of robust growth and market share gains led by Nescafe.

FY2022 Q4 Results (Oct-Dec)

Nestle posted a 66% year-on-year (YoY) rise in net profit at Rs 628 crore for the fourth quarter ended December 2022. The profit stood at Rs 379 crore in the corresponding quarter last year.

The company follows a January-December financial year.

The Board has recommended a final dividend of Rs 75 per equity share for the year 2022.

The company's sales rose 14% to Rs 4,233 crore in the December quarter, compared with Rs 3,715 crore in the same quarter of last year. Meanwhile, revenue from operations too jumped 14% YoY to Rs 4,257 crore for the reporting period.

"I am delighted to share that we delivered our highest double‐digit growth in a decade led by sustained volume and mix-led growth, leading to strong value growth. In 2022 total, sales grew by 14.5% and domestic sales increased by 14.8%, with broad-based performance across all categories," said Suresh Narayanan, CMD, Nestle.

The company has reported an EBITDA of Rs 973 crore for the fourth quarter ended December, higher by 14%, compared with Rs 851 crore reported in the same quarter of last year. Meanwhile, margins stood at 22.9%.

With some respite in crude oil, the company said input materials such as packaging have witnessed relief and demand continues to be robust with domestic outlook of prices evolving.

"Premiumization is one of the growth engines that will lead to future acceleration of the business," Suresh Narayanan said. Export sales for the quarter under review increased by 17%.

For the full year, the company has reported a net profit of Rs 2,390 crore, while net sales stood at Rs 16,970 crore. Domestic sales growth during the same period grew 15%.

The e-commerce channel delivered strong growth driven by new emerging formats such as quick commerce and click & mortar. Meanwhile, quick commerce growth was fueled by new user acquisition initiatives through targeted digital communication.

The out-of-home (OOH) segment made a strong comeback in 2022, the company said, adding that the channel has recovered from its pre-covid base to deliver robust growth.

The prepared dishes and cooking aids saw a strong growth momentum continued with a healthy balance of product mix, pricing and volume growth in Maggi noodles and Maggi Masala-ae-Magic aided by strong consumer engagements, market presence with media campaigns and attractive consumer activations.

Nestle said that the milk products continued to face challenges due to unprecedented milk price hikes. The confectionery segment gained market share and delivered strong growth driven by KitKat and Munch.

Meanwhile, organized trade continued to witness strong growth across customers and categories.