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Synopsis: Nestle India reported a 6.91% YoY increase in net profit for Q1, reaching Rs 746.60 crore, with revenue from operations up 3.33% to Rs 4,813.95 crore. Despite external challenges such as lower consumption growth and volatile commodity prices, the company achieved growth across product groups, driven by mix and volume. The Prepared Dishes and Cooking Aids segment, along with brands like MAGGI and KITKAT, performed well. E-commerce and Out-of-Home segments continued their upward trajectory. However, the company faces headwinds from high commodity prices.
Despite these positive figures, Nestle India's stock experienced a downturn, trading at Rs 2,504 per share on the BSE, a decline of 1.56%.
Suresh Narayanan, Chairman and Managing Director of Nestlé India, expressed satisfaction with the company's performance amidst external challenges such as lower consumption growth, persistent food inflation, and volatile commodity prices. "We have delivered growth across our product groups, with almost a fourth of our growth driven by mix and volume, and we aim to strengthen this trend in the coming months," Narayanan stated.
The Prepared Dishes and Cooking Aids segment maintained strong growth momentum, with innovations contributing to 30% of the segment's growth. MAGGI Korean Noodles and Masala-Ae-Magic products were particularly well-received, with the latter experiencing double-digit growth. The KITKAT brand also recorded double-digit growth, bolstered by its extensive distribution network and digital brand presence.
E-commerce continued to be a significant growth driver, contributing 7.5% to domestic sales and growing at double-digit rates. The Out-of-Home business segment also sustained its growth trajectory despite facing challenges from extreme weather conditions across India.
However, Nestle India highlighted the unprecedented headwinds in commodity prices, particularly in coffee and cocoa, which have reached all-time highs. Cereals and grains are also experiencing structural cost increases, although there is relative stability in milk prices, packaging, and edible oils.
Disclaimer: The information provided in this article is for educational and informational purposes only. It is not intended as financial advice. Investors should seek independent financial advice from a professional and consider their own individual circumstances before making any investment decisions. The data and opinions expressed herein are based on sources believed to be reliable, but no guarantee is made as to their accuracy or completeness.
