Nestle stock up 3% as Q1 profit jumps 27% to ₹934 cr

Nestle India reported a 27% year-on-year increase in its net profit at ₹934.1 crore in the quarter ending March 2024, as against ₹736.6 crore in the same period last year. The company’s profit beat Street estimates of ₹847 crore.

The FMCG major's revenue grew 9% year-on-year at ₹5,268 crore during the quarter under review, as against ₹4,830 crore in the corresponding period of the previous year. In the January to March quarter, the domestic sales of the FMCG (fast-moving consumer goods) major stood at ₹5,021.6 crore, up 8.7%, as against ₹4,612.7 crore in the March quarter of the previous year. The company’s exports were up 19% at ₹232.8 crore, as against ₹195.6 crore in the same period last year. “MAGGI Noodles and sauces witnessed an increased demand in key markets such as Canada, the United States, Australia, New Zealand, and Singapore. NESCAFÉ SUNRISE continued to gain traction in established markets such as Singapore and Taiwan, while also being exported to Canada for the first time,” says the company.

 “I am pleased to share that we have delivered double-digit growth, despite challenges posed by rising food inflation and volatile commodity prices. We have witnessed a strong growth momentum across our product portfolio led by a combination of pricing and mix. Our domestic sales crossed ₹5,000 crore this quarter, a notable milestone for us,” says Suresh Narayanan, chairman and MD, Nestle India.

Segment-wise, the company’s out-of-home business reported strong growth and e-commerce sustained its upward trajectory, contributing to 6.8 % of sales, according to the company.

The company expects milk prices to rise on account of the expected harsh summer. “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. Milk prices expected to rise on account of expected harsh summer,” says Nestle India.

Notably, the company has also announced the launch of NESPRESSO, its premium coffee product by the end of 2024. The company says \the NESPRESSO coffees and machines will be available in original and professional systems to serve domestic and professional consumers. “In recent years, coffee consumption in India has witnessed a surge, with a discernible trend towards in home consumption. A growing young population, exposure to global trends, and new experiences have established India as one of the fastest-growing coffee markets for Nestlé," says Narayanan.

The Nestle India board has announced a final dividend of ₹8.5 per share.

Amid the development, the share price of the FMCG major surged as much as 2.9% to hit an intraday high of ₹2,576.20 at 1:30 pm on the BSE. This was in line with the broader benchmark BSE Sensex, which was trading 216 or 0.29% higher at 74,069.04.