Nestle Q1 net seen down 19%

Nestle India is expected to post net profit at Rs. 260 crore in January-March quarter, down 18.8% from Rs. 320 crore in corresponding quarter last fiscal.

According to a poll conducted by media analysts, the FMCG major may see revenue slipping 13.8% at Rs. 2167 crore against Rs. 2516 crore in year-ago period. Net profit may be impacted by costs related to restart Maggi Noodles.

The company's sales may moderate in Q1CY16 due to few more Maggi variants released in the quarter. During the period, EBITDA may slip 27% at Rs. 445 crore compared to Rs. 610 crore while EBITDA margin is seen at 20.5% versus 24.2% year-on-year.

EBITDA margin will be impacted by start-up costs of noodles.

Revenue in culinary product is likely to decline given higher base. Exports business may also be soft due to Nepal issue.

Margins may expand sequentially as gross margin will be aided by lower sales of Maggi noodles. This is since Maggi noodles have relatively low margins. Advertising and promotion costs may be increased in the quarter. Weakness in coffee portfolio is likely to be countered by milk and nutrition products.