Nestle India results: Net rises 4.4% in Dec qtr stirred by Nescafe success

Strong demand for Nescafe classic and Nescafe sunrise drives double-digit growth of beverage portfolio

Packaged foods major Nestlé India reported a 4.4 per cent rise in net profit to Rs 656 crore in the fourth quarter ended December 31, 2023, backed by consistent performance from all key brands, particularly Nescafé. The company had reported a net profit of Rs 628 crore in the year-ago period.

“This quarter, strong demand for Nescafé Classic and Nescafé Sunrise propelled the beverage product group to be our largest contributor to growth. Our beverage business witnessed double-digit growth, and Nescafé gained significant market share. The milk and nutrition product group posted double-digit growth,” the company said in an earnings release.

The maker of KitKat chocolates and Maggi noodles reported an 8.3 per cent increase in net sales to Rs 4,584 crore from Rs 4,233 crore in the year-ago period. Its profit before interest, depreciation, and tax rose 12.2 per cent to Rs 1,125 crore from the year-ago period.

“Domestic sales grew by 8.9 per cent on the back of pricing and mix growth, with strong momentum in e-commerce and out-of-home channels. The quarter was marked by an increase in brand investments across all product groups,” said Suresh Narayanan, chairman, and managing director, Nestlé India.

The company’s e-commerce channel contributed to 7 per cent of quarterly sales, while the out-of-home business reported strong growth, fuelled by portfolio transformation, premiumisation, channel prioritisation, digital lead generation, and new customer acquisition.

The fast-moving consumer goods major also expanded its direct coverage this quarter by adding 5,300 villages, reaching a total of over 196,000 villages, closer to its ambition of 200,000 villages.

In calendar year 2023, the company’s total sales crossed the Rs 19,000 crore mark, an uptick of 13.3 per cent.

In its commodity outlook, the company said that coffee prices continue to be volatile and historically high due to limited availability. Additionally, a healthy milk flush in winters is expected to keep prices stable.

“Commodities such as wheat and rice are stable as of now. Rain deficit is expected to impact the production of maize, sugar, oilseeds, and spices, which may impact pricing,” it added.

The company, which followed the January-December financial year, will now follow the April-March financial year. Its current financial year has been extended by one quarter, thus ending on March 31, 2024. The company’s board also approved the declaration of the third interim dividend of Rs 7 per equity share.