Nestle India net profit declines 4.3% to Rs 515.3 cr in April-June qtr

Nestle India, which makes Maggi noodles, KitKat chocolate, sees 'early signs of softening' in sale of some commodities

Nestle India on Thursday reported a net profit of Rs 515.3 crore in the April-June quarter, down 4.3 per cent from last year. The consumer goods firm’s revenue from operations was Rs 4,036.6 crore, up 16.1 per cent.

“The growth is broad based and while being primarily driven by pricing, [it] has a healthy underlying volume and mix evolution. I am also happy to share that the ‘out of home’ space got back to accelerated growth in channels like hotels, education centres and workplaces,” said Suresh Narayanan, chairman and managing director of Nestle India, which makes Maggi noodles and KitKat chocolate.

The maker of condensed milk brand Milkmaid recorded double-digit growth in milk products and nutrition. Kitkat and Nestle Munch chocolates too clocked strong double-digit growth aided by media campaigns, attractive consumer promotions, trade inputs, and focused distribution drives, Narayanan said. (Nestle India follows a calendar year for reporting financial results.)

Nestle is growing in cities and towns to reinforce the execution of its RURBAN (rural + urban) strategy, Narayanan said. “We are also heartened by a smart uptick in sales in rural markets this quarter which augurs well for a credible momentum in future.”

The company’s e-commerce channel sustained growth despite a higher base from Covid-related tailwinds in Q2 2021 and contributed 6.4 per cent to the quarterly sales.

Out of Home (OOH) posted strong performance driven by better channel opening and business-led initiatives and in exports, expanding its product offering across the globe remains a key growth driver, especially with the MAGGI range in both ethnic and mainstream channels in the UK, Canada and USA.

In its commodity outlook for the short-term and medium-term, Nestle India said in a press release, “We are witnessing early signs of softening in few of the commodities like edible oils and packaging materials. Fresh milk, fuels, grains and green coffee costs are expected to remain firm with continued increase in demand and volatility.”

Nestle India’s board of directors approved the acquisition of the pet foods business from Purina PetCare India for Rs 123.5 crore. The business transfer (slump sale) would entail the transfer of all assets and liabilities related to the pet food business including employees of Purina Petcare India. As of March 31, Purina Petcare India held cash and cash equivalent of Rs.4.4 million and debt and debt-like items of Rs 41 lakh.