Nestle India Q3 net up 9%

The firm said the profit was impacted owing to higher input cost, which increased because of a rise in milk prices and its derivatives

Nestle India has reported a 9.2 per cent rise in net profit in the July-September quarter at Rs 311.3 crore. The figure was Rs 285 crore in the year-ago period.

However, the company missed Street expectations by a narrow margin.

Equity analysts had expected Nestle to post a net profit of Rs 316 crore.

The firm said in a statement that profit was impacted owing to higher input cost, which increased because of a rise in milk prices and its derivatives. However, the company reduced finance costs by repaying external commercial borrowings, it added. Nestle India, which follows January-to-December financial year, reported net sales at Rs 2,557.8 crore in the September quarter, an increase of 8.9 per cent from Rs 2,348.3 crore reported in the same quarter last year.

Net domestic sales grew 9.9 per cent to Rs 2,399.17 crore, mainly from better realisations. However, sales from exports declined by 3.9 per cent to Rs 158.6 crore as export of coffee fell during the quarter under review.

“The top and bottom line results for the quarter are in line with our expectations. Despite severe input cost pressure, focus on various efficiency and cost containment programmes have enabled us to deliver healthy margins,” said Etienne Benet, managing director, Nestle India.

“Though the sales dynamics is better, we remain cautious as we are yet to feel the buoyancy from the external environment. We are particularly satisfied that our strategy of nutrition, health and wellness for existing range and innovations, value-up portfolio management and redirection of marketing investments is starting to build further momentum,” Benet noted.

According to the company, its products including Maggi Oats Noodles and Maggi Vegetable Atta Noodles, Maggi Masala-ae-Magic, Kit Kat chocolates, Nescafé, Milkmaid and Everyday performed well in the quarter.

Nestle India said it has completed its major capital expenditure programme, announced in 2010, and that it has fully repaid the borrowings made for this.

Nestle shares were down 2.2 per cent to Rs 5,969.80 apiece on the BSE on Tuesday.