Nestle India posted a net profit of ₹746.6 crore for the quarter ended June 30, up 6.9 per cent compared to ₹698.3 crore in the corresponding quarter of the previous fiscal year. Revenue from operations stood at ₹4,813.95 crore, up 3.33 per cent. The company said total sales grew by 3.8 per cent, while domestic sales growth was pegged at 4.2 per cent.
The company’s board declared interim dividend of ₹2.75 per equity share on July 8.
Suresh Narayanan, Chairman and Managing Director, Nestle India, said, “Despite external challenges such as lower consumption growth, concerns about continued food inflation, and volatile commodity prices, we have delivered growth across our product groups. Almost a fourth of our growth has been mix- and volume-led, and we hope to strengthen this trend in the coming months. Five of our top twelve brands grew at double-digit rates. Our Beverages business stood out with strong double-digit growth, despite a scorching summer across many parts of India.“
The company said strong consumer-led activations in the “cold” coffee segment helped Nescafe Classic post double-digit growth. Nescafe Sunrise and Gold also posted strong growth. “The launch of Nescafe Roastery has further strengthened our premium coffee portfolio. In our endeavour to build cold coffee as a strategic pillar, we successfully launched Nescafe Ice Roast, which received an encouraging response across key markets and channels,” he added.
Prepared Dishes and Cooking Aids, led by Maggi, maintained their growth momentum. Innovations contributed to about 30 per cent of the growth in the quarter. “We take pride in confectionery being one of the most distributed businesses, with highly connected digital brands and a slew of innovations in the pipeline. The Milk Products and Nutrition portfolio also maintained growth,” Narayanan said.
The e-commerce channel now contributes 7.5 per cent of domestic sales and is growing at double digits. “The Out-of-Home business continued its growth momentum despite unprecedented headwinds of extreme weather conditions across India,” the company said.
“We continue our relentless focus on building ‘distribution infrastructure’ as our touchpoints in RUrban geographies have been expanding consistently. During the period, we have successfully added over 800 new distribution touchpoints, including cash distributors, re-distributors, and wholesale hubs. Moreover, this quarter our village coverage has increased by 5,000, taking it to about 2,05,000 villages,” Narayanan added.
Nestle India said there have been 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. There is relative stability in milk prices, packaging, and edible oils,” it stated.
The packaged food major added that it has also launched the “Re-distributor Management Solution” for sub-distributors in rural markets to improve efficiency through automated order processing and to make informed decisions about stocking and promotions.
The company said that while the organised retail channel clocked double-digit growth, the out-of-home business witnessed strong growth momentum, fuelled by portfolio transformation, innovations, penetration, and premiumization.
In terms of exports, the company said it expanded its export footprint by adding new SKUs in Canada, the Middle East, and North Africa. It has also begun exporting breakfast cereals from India.