Colgate shares jump 6.7%, Nestle tanks 2.7% after Q1 results

Shares of FMCG majors Colgate Palmolive Ltd and Nestle India were in focus on July 27 as the companies announced their financial results for the April to June period on July 27. The share price of Colgate Palmolive was trading 6.72% higher at ₹2,009.80 whereas Nestle India shares plunged 2.72% or 619.50 points at ₹22,184.95 at 2:04 pm. The broader BSE Sensex, however, was trading 0.51% or 338.62 points lower at 66,369.58.

The net profit of Colgate Palmolive Ltd, during the quarter under review, stood at ₹273.68 crore, witnessing a growth of 30.52% as against ₹209.67 crore in the corresponding period of the previous year.

Registering a growth of 10.7%, the company’s revenue from operations stood at ₹1,131.47 crore as against ₹1,186.59 crore in the same period last year. The company’s total income grew 10.8% at ₹1,338.64 crore against ₹1,1208 crore in the same period of the corresponding year. The company’s domestic sales grew by 12.3% during the period under review.

"We are pleased with the results for the quarter that saw strong quarter-on-quarter sales growth and improvement across profitability ratios. This has been driven by good execution against our strategy focussed on growing the oral care category. While domestic sales grew at 12.3% compared to the same quarter of last year, toothpaste sales recorded a high double digits growth. We are also seeing early signs of recovery in rural markets and remain optimistic about continued improvement," says Prabha Narasimhan, managing director & CEO, Colgate-Palmolive (India) Limited.

Following the development, shares of Colgate Palmolive surged as much as 7.08% to hit a 52-week high of ₹2,106.70 apiece on the BSE. During the session, the company’s market capitalisation stood at ₹54,713.99 crore, with 70,427 shares exchanging hands on the BSE as against 0.11 lakh shares.

Meanwhile, Nestle India reported a 36.8% increase in consolidated net profit at ₹698.3 crore, during the quarter under review, against ₹510.24 crore reported in the same period of the previous year. However, on a sequential basis, the profit declined 5.1% against ₹736.64 crore reported in Q4 of FY23.

Registering an increase of 15.1%, the revenue from operations of the FMCG major stood ₹4,658.5 crore against ₹4,045.69 crore in the same period last year. The company’s domestic sales grew 14.6% at ₹4,420.77 crore against ₹3,857.5 crore in Q1 of FY23. "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," says Suresh Narayanan, Chairman and Managing Director, Nestle India.

The company notes that 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. Robust prices are elevated and are expected to remain volatile,” it says.

Following the development, shares of Nestle India, however, plunged 3.2% to hit an intraday low of ₹22,081.75 apiece on the BSE, in line with the broader market. During the session, the company’s market capitalisation stood at more than ₹2.13 lakh crore with 3,723 shares exchanging hands as against the two-week average of 1,061 shares.