Net sales

Nestle Q1 Profit slips 1.25% to Rs 594.71 Crore; Net sales up 9.7%

On Thursday, FMCG major Nestle India Ltd reported a 1.25% decline in net profit to Rs 594.71 crore for the first quarter ended March 2022, mainly due to rising input costs.

The company, which tracks the financial year from January to December, had posted a profit of Rs 602.25 crore in the same period a year ago, Nestle said in an ESB filing.

However, Nestle India’s net sales increased by 9.74% to Rs 3,950.90 crore in the quarter from Rs 3,600.20 crore in the corresponding period of the previous fiscal year, added the society.

“As highlighted in previous quarters, the cost of key raw materials and packaging is at 10-year highs, and costs have continued to increase this quarter, impacting operating profit. “Continued inflation is likely to be a key driver in the short to medium term,” Nestlé India Chairman and CEO Suresh Narayanan said in the Nestlé India earnings release.

However, “we are confident to weather this turbulence with scale, efficiency, mix and pricing strategies that we will deploy wisely,” he added.

Its total expenditure in the January-March quarter increased by 12.98% to Rs 3,195.90 crore from Rs 2,828.61 crore a year ago.

Nestle India’s domestic sales jumped 10.23% to Rs 3,794.26 crore from Rs 3,442.03 crore in the January to March quarter of 2021.

Its exports fell slightly by 0.96% to Rs 156.64 crore from Rs 158.17 crore in the prior year quarter.

“Domestic sales growth is broad-based and largely driven by volume and mix. Export sales were down 1%, largely due to a change in product mix,” he said. he declares.

Narayanan said, “This quarter, we achieved double-digit domestic sales, driven by volume and mix, which once again demonstrates the strength of our brands, consumer resonance and team resilience. Nestlé India and our partners”.

Nestlé’s key brands continue to perform well, with Maggi Noodles, KitKat, Nestle Munch, Nescafe Classic and Sunrise posting creditable double-digit growth this quarter, he said.

“This growth across a range of categories was made possible by a mix of innovative campaigns, consumer-engaging promotions, analytics-based consumer insights, geo-targeted distribution campaigns and leveraging the opportunity of festive seasons,” Narayanan said.

During the quarter, Nestlé India, in line with its strategy, continued to make good progress in its journey to smaller towns and villages and this paid off with “sustained strong rural growth”.

It was complemented by strong growth in smaller city classes and urban agglomerations, Narayanan added.

“Our strong performance in e-commerce continued as the channel grew 71% and now contributes 6.3% of national personalization sales,” he said.

Meanwhile, in a separate filing, Nestlé India said its board, at a meeting held on Thursday, declared an interim dividend of Rs 25 per share with a face value of Rs 10 for 2022.

Discussing the near to medium term outlook for commodities, Nestlé said major commodities such as edible oils, coffee, wheat and fuel remain firm to bullish as packaging material costs continue. increase in a context of supply constraints, rising fuel and transportation costs.

“Input costs are expected to follow an upward trend both globally and locally. Fresh milk costs are expected to remain firm with the continued increase in demand and rising feed costs for farmers,” Nestle India said.

Nestle India Ltd’s share traded at Rs 18,368.85 on the BSE in the afternoon, up 0.30% from its previous close.