Nestle India posts 9.6% YoY jump in net sales at Rs 3,865 cr for Jul-Sep quarter; profit up 22%

Nestle India Limited today reported net sales at Rs 3,865 cr for the quarter ended September 2021, which was up 9.6 per cent year-on-year (YoY). The domestic sales growth went by 10.1 per cent on a broad-based and was largely driven by volume and mix, the company said in its exchange filing. 

The profit from operations stood at 22.3 per cent of sales at Rs 617 Crore.  The Earnings Per Share (EPS) for the reporting quarter was Rs 64.04. 

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The Board of Directors of Nestle India have declared a second interim dividend for 2021 at Rs 110 per equity share (Face value Rs 10/‐ per equity share) amounting to Rs 10,60.57 million, which will be paid on and from 16 November 2021, the exchange filing said. 

This is in addition to the first interim dividend of Rs 25 per equity share paid on 19 May 2021. 

The results were announced after market hours. Shares of Nestle ended at Rs 19377.50, down by Rs 49.75 or 0.26 per cent.

Business Comments – Q3 2021: 

E‐commerce: The channel is expected to continue its growth journey and Nestlé India  is gaining increasing traction herein. E‐commerce as a channel is also developing new models like Quick Commerce (hyper‐local) leading to lower delivery lead times, effectively improving shopper experience. 

Organised Trade: Decrease in pandemic intensity and increase in vaccination coverage contributed to broad‐based growth across all food & beverages categories especially coffee & confectionery. 

Out of Home (OOH): OOH channel is on a recovery path with gradual opening of hotels, restaurants, offices and malls. There are signs of a return to pre‐pandemic levels of  business traction in some geographies, categories and channels. 

Exports: MAGGI Noodles and POLO have been introduced in the markets of Middle East  recently. Crunch Wafers have been introduced in ASEAN markets.

Commodity Outlook in short to medium term:   

Price outlook for key categories like wheat, coffee, edible oils remains firm to bullish while costs of packaging materials continue to increase amid supply constraints, rising fuel and  transportation costs. Input prices expected to be on bullish trend both globally and to some extent locally. Fresh milk prices are expected to remain   firm with continued increase in demand and rise in feed costs to farmers. The recent announcement of scrapping import duties on edible oils, if continued next year, beyond March 2022, can have positive impact in muting food inflation pressures. We continue to, in an environment of raw and packaging material inflation, keenly look for opportunities for cost optimisation and efficiencies as we have successfully done in the past. 

Cautionary Statement: 

Statements in this Press Release, particularly those which relate to Outlook, describing the  Company’s projections, estimates and expectations may constitute ‘forward looking statements’ within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied in the statement depending on the circumstances.