Nestle India results: Nestle India, the FMCG major, released its June quarter numbers on Thursday. The company also announced that it has changed its financial year to the April-March cycle. Till now, the company followed a calendar-year cycle. For the quarter under review, the company reported a 36.86 per cent rise in its net profit to Rs 698.34 crore, compared to Rs 510.24 crore logged in the year-ago period. On a sequential basis, the figure slipped 5.1 per cent. Revenue from operations came in at Rs 4,658.53 crore, up 15 per cent against Rs 4,045.69 crore logged in the year-ago period.

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The net profit was slightly ahead of Zee Business analysts' estimates. For instance, the research desk had projected the company's profit after tax (PAT) to grow 32 per cent to Rs 679 crore. However, the revenue was exactly in line.

Commenting on the results, Suresh Narayanan, Chairman and Managing Director, of Nestlé India, said, "I am pleased to share that we have, yet again, delivered robust performance, with all product groups registering double-digit growth. 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 per cent, 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, NESCAFÉ, and MAGGI, among others. 

The company further added that its domestic sales growth was 14.6 per cent while profit from operations came in at 20.7 per cent of sales. Earnings per share (EPS) of the company for the quarter under review were Rs 72.43.

Nestle India Results: Business Comments – Q2 2023

  • E-commerce: The channel contributed to 6.5% of the quarterly sales and continued the growth momentum driven by Quick Commerce
  • Organized Trade: The channel continued delivering strong broad-based growth across categories driven by store expansion and improved footfalls
  • Out of Home (OOH): Continued to deliver robust growth through premiumisation and portfolio transformation initiatives. Strong performance is an outcome of kiosk expansion and prioritization of emerging channels
  • Exports: Registered robust double-digit growth across all categories through the proliferation of products such as NESCAFÉ Sunrise and Polo  

Product Groups Performance – Q2 2023 (Domestic):

  • Prepared Dishes and Cooking Aids: Registered double-digit growth driven by MAGGI Noodles and aided through distribution expansion and impactful consumer activations.
  • Milk Products and Nutrition: Delivered strong double-digit growth despite inflationary pressures. Growth was driven by Milkmaid and Peptamen. The growth was further aided by the launch of Resource Fibre Choice and Everyday Zero added sugar.
  • Confectionery: Registered double-digit growth led by KITKAT and MUNCH. Performance was supported by strong consumer engagement and media campaigns.
  • Beverages: The product group registered robust double-digit growth led by greater household penetration of NESCAFÉ Classic, NESCAFÉ Sunrise and NESCAFÉ GOLD for both hot and cold coffee occasions. NESCAFÉ continued the journey of innovation, with the launch of the cold coffee premix NESCAFÉ ALL IN 1 FRAPPE.
  • Petcare Business: Continues to provide complete nutrition for cats and dogs. Felix has received positive feedback from trade and cat parents.

Source: Earnings release

On the outlook for commodities, the company said commodities such as edible oils, wheat, and packaging materials have been in the lower price range. "A reversal of price trend is noted in fuels, with prices softening in the second quarter after reaching a higher level towards the end of quarter one. In fresh milk, there has been price stability. Robusta prices are elevated and are expected to remain volatile."

Nestle India: Changes in Financial Year Cycle

The Board of Directors, at its meeting held today, inter alia, approved to change the Financial Year of the Company from "1st January - 31st December" to 1st April – 31st March", subject to approvals. Accordingly, the current Financial Year of the Company shall be extended upto 31st March 2024 covering a period of 15 months commencing from 1st January 2023 to 31st March 2024 and subsequent Financial Years of the company would begin from 1st April every year and ending with 31st March of the subsequent year, the company added.