Nestle India slips 4% after posting slightly lower Q2 net profit; Details

Nestle India reported a consolidated net profit of Rs 899.49 crore for the September quarter, compared to Rs 908.08 crore a year ago

Nestle India shares declined 3.9 per cent in trade on Thursday and logged an intraday low of Rs 2,364.8 per share on BSE. The selling pressure in the stock came after the FMCG major reported mixed numbers for the September 2024 quarter.

At around 1:01 PM, Nestle shares were down 3.52 per cent at Rs 2,375.6 per share on the BSE. In comparison, the BSE Sensex was down 0.55 per cent at 81,056.59 around the same time.

The market capitalisation of the company around the same time stood at Rs 2.29 lakh crore. 

Today, during market hours, the KitKat and Maggi maker reported a consolidated net profit of Rs 899.49 crore for the quarter ended September 30, down 0.94 per cent from Rs 908.08 crore a year ago. However, it was above Business Standard's estimate of Rs 876 crore. 

Nestle's revenue for the quarter came in at Rs 5,104 crore, compared to Rs 5,036.82 crore in the year-ago period, up 1.33 per cent year-on-year (Y-o-Y). It was below Business Standard's estimate of Rs 5,333.05 crore. 

As per Nestle, commodity prices remain elevated for coffee and cocoa, with prices of cereals and edible oils also being accentuated by recent developments.

The company's total income for the quarter under review stood at Rs 5,110.86 crore, compared to Rs 5,070.09 crore a year ago, an increase of 0.8 per cent. 

Nestle's e-commerce business grew by almost 38 per cent on the back of quick commerce and fueled by brands such as Kitkat, Nescafe, Maggi and Milkmaid, among others. Meanwhile, Maggi noodles showed positive volume growth during the quarter.

Management commentary 

"Despite a challenging external environment with muted consumer demand and high commodity prices for coffee and cocoa, we remained resilient in our pursuit to deliver growth," said Suresh Narayanan, the outgoing chairman and managing director of Neste India.

Narayanan added: "This quarter, five of our top 12 brands grew at double-digit. However, some key brands witnessed pressure due to softer consumer demand."

With Narayanan set to retire in July next year, the company had announced the name of Amazon India veteran Manish Tiwary as his replacement.

Apart from product innovation, new channels have maintained momentum. For instance, e-commerce delivered high double-digit growth, which was the highest in the last seven quarters, contributing to 8.3 per cent of domestic sales.

In the past one year, Nestle shares have gained 6 per cent against Sensex's rise of 23 per cent.