Nestle India Q4 results have beaten street estimates. The company has reported a jump in net profit of 27 percent to ₹934 crore.
FMCG major Nestle India has revealed its Q4 results and the standalone profit has jumped as much as 27 per cent to ₹934 crore, which was a significant increase from ₹737 crore a year ago, the company has reported in its regulatory filing. Nestle also reported a surge in revenue by 9% to ₹5,268 crore from the earlier ₹4,830.5 crore (YoY). The jump has been on account of higher pricing as well as demand for its packaged food items. Nestle India net profit beat analysts’ estimates by a wide margin – they had pegged it at ₹858 crore.
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Notably, FMCG companies have seen demand stay steady, and even increase, for products like chocolates and biscuits. Also, price hikes have been effected coffee and noodles to protect bottomlines, which have borne fruit.
The company has also announced a ₹8.5 dividend for the 15 months’ financial year ended 31st March 2024.
In his statement, Suresh Narayanan, Chairman and Managing Director, Nestle India, said, “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.”
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Nestle reported an increase in its Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) of 21.8% to ₹1,337.7 crore from ₹1,098,7 crore. It also indicated that the EBITDA margin improved by 270 basis points (bps) to 25.4% from 22.7%, YoY.
In its statement, the company has highlighted some concerns too that it will have to deal with. It revealed, “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 are expected to rise on account of expected harsh summer.”
At 13:27 pm, Nestle India share price was trading 2.87% higher at ₹2,572.00 on the National Stock Exchange (NSE).
Notably, the Q4 results have been declared in the backdrop of a major controversy that the company finds itself in regarding the levels of sugar content in baby food.
Reacting to that, Indian food safety regulator FSSAI on Thursday said it has launched a drive to collect samples of Nestle’s Cerelac baby cereals from across the country.
The row started after a global report published by Swiss NGO Public Eye was released that claimed Nestle’s product had high sugar content.
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Both the consumer affairs ministry and the National Commission for Protection of Child Rights (NCPCR) have expressed concern over the matter.
The report alleges that, as compared to markets in Europe, Nestle baby products sold in less developed South Asian countries including India, Africa and Latin America, have higher sugar content.
Nestle India – the big numbers
* Nestle India net profit of 9.34 billion rupees ($112.03 million)
* Nestle India revenue from operations climbed to 52.68 billion rupees, from 48.31 billion rupees a year earlier.
