Nestle shares rise 2% after reports suggests company is mulling price hikes

Nestle India shares rose 1.6 per cent in Tuesday's trade on BSE, logging an intraday high at Rs 2,255.9 per share. The stock was in demand after a Reuters report suggested that the company would consider raising the prices of its products by a small margin to counter inflation in coffee, cocoa, and edible oil while aiming to keep sales coming in.

 

Around 1:07 PM, Nestle India share price was up 1.34 per cent at Rs 2,250 per share on BSE. In comparison, the BSE Sensex was up 0.28 per cent at 74,660.84. The market capitalisation of the company stood at Rs 

 

2,16,935.36 crore. The 52-week high of the stock was at Rs 2,777 per share and the 52-week low was at Rs 2,131.5 per share.

 

"Wherever (price increase) is absolutely essential, we will have to take some pricing action," Nestle India Managing Director Suresh Narayanan told Reuters at the sidelines of an industry conference in Mumbai.

 

Further, he said that the company will keep the price hikes "as low as possible," adding that "price increases are not the salvation for the industry because it impacts volume growth."

   

In Q3, Nestle India's profit rose 4.9 per cent year-on-year (Y-o-Y) to Rs 688 crore as compared to Rs 655.6 crore. The revenue of the company grew 3.9 per cent to Rs 4779.7 crore as compared to Rs 4600.42 crore a year ago. 

 

The maker of KitKat (chocolate) and Nescafe reported a 3.9 per cent increase in net sales to Rs 4,779.7 crore from Rs 4,600.4 crore in the year-ago period. Nestle's beverages retail business crossed Rs 2,000 crore in the last 12 months, with Nescafe (coffee) strengthening its leadership position. However, the company flagged a sustained challenging demand environment in the country.

 

“It was a quarter marked by food inflation and moderation in urban consumption, with a gradual recovery in rural consumption,” Suresh Narayanan, chairman and managing director, said in an earnings release. 

 

In the past one year, Nestle India shares have lost 15  per cent against Sensex's rise of 2.2 per cent.