As many as 70% of Nestle India‘s public shareholders and 57% of total shareholders have voted against the increase in royalty payment to the parent company.
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The resolution that was being considered included paying as much as 3.25% net of taxes of the net sales of the company’s products to its parent company Societe des Produits Nestle SA. The same was to be paid in a staggered manner over five years with an increase of 0.15% per annum over the current royalty of 4.5% per annum, effective from July 1, 2025.
Recently, Nestle India’s CMD Suresh Narayanan had told CNBC-TV18 that the royalty increase that was being looked at was “relatively modest”.
“The ask is fundamentally 15 bps each year for five years. And certainly, the margin evolution of the blue categories that we are capable of doing in our existing categories is more than that,” Narayan said, adding that the increase in royalt was for help and suppor.
He said as a result, Nespresso, pet care, and more will require strong support from the group to make it happen.
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“All of this will come in at the heft of the parent, in terms of technology, competence and infrastructure. For this, the royalty increase that is being looked at is relatively modest,” he had told CNBC-TV18.
The company’s EBITDA margin for the fourth quarter expanded by 270 basis points to 25.4%, from last year’s 22.7%. It was also 100 bps higher than Street estimates of 24.4%
The company witnessed a 9.1% increase in revenue during the March quarter at ₹5,268 crore. It was slightly higher than Street estimates of of ₹5,180 crore. It was also the first instance of the company’s domestic sales crossing the ₹5,000 crore mark.
The company’s net profit for the fourth quarter increased by 27% from the previous year to ₹934 crore. It was also higher than Street estimates of ₹850 crore.
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Its earnings before interest, tax, depreciation and amortisation (EBITDA) stood at ₹1,337.7 crore, registering a growth of 21.8% from the year-ago period and was higher / lower than the ₹1,265 crore expectation.
