Covid-19 impact on business not materially adverse so far: Nestle India

Nestle India, a subsidiary of NESTL SA of Switzerland, says it has "strong cash position" and is in a "comfortable liquidity position" to meet its financial commitments

FMCG major Nestle India on Thursday said the impact of coronavirus pandemic on its business operations has not been "materially adverse" so far and the company will continue to evaluate the consequences of the health crisis and subsequent lockdown as the situation evolves.

The company also does not see any "specific challenge in terms of its capital or financial resources" or any "significant deviation in profitability", Nestle India said in a regulatory filing.

Nestle India, a subsidiary of NESTL SA of Switzerland, further said it has "strong cash position" and is in a "comfortable liquidity position" to meet its financial commitments, news agency PTI reported.

"While the impact of Covid-19 on the company's business operations has not been materially adverse so far, it is extremely difficult to assess its impact on near-term and annual results. The company continues to evaluate the impact of Covid-19 as the situation evolves," said Nestle India.

It further said it has resumed operations at all its eight plants and distribution centres/warehouses.

"The company has resumed operations at all of its manufacturing locations and distribution centres/ warehouses and scaling up continues in all areas of operations while adopting stringent safety practices and following standard operating procedures for social distancing," it said.

Nestle India continues to witness demand for most of its products and its focus in the immediate period is to make sure that its products are available to consumers.

Commenting on the impact of Covid-19, Nestle India said it is "extremely difficult" to assess its impact in the near-term and on annual earnings.

"Due to the unpredictable and fast changing Covid-19 situation, it is very difficult to assess the future impact of Covid-19 on business operations and it is expected to evolve over a period of time," it said.

The company also said that it has a "strong cash position" and has enough liquidity to meet its financial commitments.

"Further, the company does not foresee any challenge in realising/recovering its assets and thus there shall not be any significant impairment to the carrying value of its assets," it said.

Last month Nestle India, which follows January-December financial year, had reported 13.54 per cent rise in January-March quarter net profit at Rs 525.43 crore and 10.84 per cent increase in its net sales at Rs 3,305.78 crore.

The company had witnessed a volume growth and contribution from e-commerce went up significantly, while out of home sector performance was subdued.