Nestle India pre-tax profit up 12.4% to Rs 787 cr in September quarter

Weathering impact of localised lockdowns, it managed to grow its net sales by 10.2 per cent during the quarter to Rs 3,525 crore

Beating street estimates, fast moving consumer goods (FMGC) major Nestle India reported a 12.4 per cent growth in its profit before tax (PBT) for the July-September quarter. The Gurgaon-headquartered firm posted Rs 787 crore PBT, compared to Rs 700 crore in the corresponding quarter last year.

Weathering the impact of localised lockdowns, it managed to grow its net sales by 10.2 per cent during the quarter to Rs 3,525 crore from Rs 3,199 crore. Both its domestic sales (over 95 per cent of the total sales) and exports grew at the same pace.

According to the firm, demand in 'out of home' channel that comprises a significant part of its portfolio, improved through the quarter. However, it continues to be impacted by Covid-related disruptions. Its ‘other income’ decreased due to lower yields and lower average liquidities, it said. Further, its employee benefit expenses grew by over 15 per cent due to the incentives it offered to production manpower in view of Covid.

“I am extremely proud of my team, our distribution partners, hundreds of suppliers including MSMEs, many thousand farmers, agencies, service providers large and small, as well other stakeholders in our business, for their  determination, anticipation, tenacity, imagination and sheer hard work that has helped us achieve a strong performance this quarter. This has been achieved in the face of daunting challenges in operations thrown at us by this pandemic”, said Suresh Narayanan, chairman and managing director, Nestle India.

While, till the end of the last quarter some disruptions were impacting its factory operations by end-September, its factories returned to normal output. During the quarter, its growth was driven by an improved supply situation, as factories returned to normal output.

“Boosted by an increase in in-home consumption, our key brands like Maggi noodles and sauces, KitKat, Munch and Nescafe witnessed double digit growth. Demand in ‘Out of Home’ channels improved during the quarter but continues to be impacted due to the overall environment. We continued our strong performance in the e-commerce channels, which grew by 97 per cent and now contributes about 4 per cent of domestic sales”, he said.

Nestle India has declared an interim dividend of Rs 135 per equity share, amounting to Rs 1,302 crore.