Food and beverages major Nestle India reported a marginal rise in net profit for the October-December quarter. The firm's profit after tax rose 0.2 per cent year-on-year to Rs 483.3 crore from Rs 472.6 crore in the corresponding quarter previous year.
Its net sales surged 9.2 per cent to Rs 3,418 crore from Rs 3,131 crore backed by strong offtake in the domestic market. While its domestic business, which contributes over 90 per cent towards its topline, grew 10.1 per cent, exports declined by 7.7 per cent during the quarter.
Nestle, which follows a calendar year format, also declared its yearly financial for 2020. In spite of Covid-induced disruptions, its sales grew 8.1 per cent in 2020 with 8.5 per cent surge in its domestic sales. Rapid rise in in-home consumption across the country drove its ready-to-cook and ready-to-eat products. The firm said nearly two-thirds of its portfolio grew in double digits due to higher demand for such products. Incidentally, Nestle leads the local market in a bunch categories like instant noodles, dairy whitener, wafers and confectioneries, among others.
In 2020, its net sales climbed to Rs 13,390 crore from Rs 12,295 crore in 2019. Nestle said, its domestic sales growth was largely driven by volume & mix and was on a broad base. "However, demand in out of home channel was impacted throughout the year due to Covid. After initial challenges due to the pandemic, the demand in out of home channels continued to improve, sequentially over quarters and we remain confident of its recovery", it said.
Like in the December quarter, its margins, however, suffered for the full year. In 2020, its net profit grew at a lower pace than its topline. Nestle reported Rs 2,082 crore profit - 5.8 percent higher than Rs 1,968 crore it had reported in 2019.
"We delivered strong domestic sales growth. Nearly two-thirds of our key brands like MAGGI Noodles, KITKAT and NESCAFÉ Classic posted double digit growth last year. This was backed by a step-up in marketing spends, especially in the last quarter. Our innovation and renovation pipeline continued to be a thrust area across categories like Foods, Breakfast Cereals and Nestlé Health Sciences," said Suresh Narayanan, chairman and managing director, Nestle India.
The pandemic and the lockdown boosted Nestle's online sales significantly in 2020. The firm said it has registered 111 per cent growth in online channel and the ecommerce segment now contributes 3.7 per cent towards total sales.