Nestle India announced a 36.8% increase in profit for the June quarter on Thursday. Standalone profit increased from ₹510 crore in the same period a year prior to ₹693.3 crore for the three months that ended on June 30.
Domestic sales increased by 14.6% year over year, contributing to an increase in operating revenue of 15% to ₹4,658 crore.
Ebitda increased by 25.4% year over year, and margins increased by 186 basis points. At the close of trading on Thursday, shares of Nestle India were down 2.08% on the BSE.
The company reported double-digit growth across all product segments. Throughout the quarter, the company increased its focus on brand development and continued to make important investments.
“This is the fifth quarter in a row of double-digit growth across all product groups. Domestic sales growth is broad based and grew by 14.6%, on the back of prudent pricing and supported by mix and volume with targeted brand support. Key brands continued to perform well, led by Kitkat, Nescafe and Maggi among others,” Suresh Narayanan, chairman and managing director, Nestlé India.
“The out-of-home business continued to deliver strong growth this quarter, through a pivot of dual strategies in terms of portfolio transformation and robust precise execution of differentiated channel and geography plans to harness big growth opportunities. Our RURBAN strategy was helped by increasing distribution footprint with relevant portfolio, thereby achieving higher penetration,” Narayanan said.
Analysts noted that Nestle domestic volumes fell short of expectations.
Nestle’s volume growth slowed down, resulting in a shortfall in revenue, whereas realisation was a bigger driver of revenue growth. However, the decrease in input prices was helpful, as the gross and Ebitda margins both exceeded our projections. All cities, municipalities, and product categories saw a revenue increase, according to analysts at Jefferies.