FMCG major Nestle India on July 28 said its net profits for the quarter ended June stood at Rs 515.34 crore, down 4.31 percent from Rs 538.58 crore in the same quarter last year.
This is compared to Rs 575 crore that an analyst poll by CNBC TV18 projected.
Revenue from sale of products during the quarter came in at Rs 4,006.86 crore rising 15.72 percent from Rs 3,462.35 crore in the year ago quarter. The growth was higher than the expectations of around 10-13 percent.
Our endeavour this quarter was to secure our ‘engines of growth’ in this inflationary context and to enable sharp overall business recovery when the pressures abate,” said Suresh Narayanan, Chairman and Managing Director, Nestle India. “The growth is broad based and while being primarily driven by pricing, has a healthy underlying volume and mix evolution.”
The company said that the ‘out of home’ space got back to accelerated growth in channels like hotels, education centres and workplaces. As far as channels are concerned, ‘organised trade’ saw broad based growth across consumers and categories, it added.
The maggi maker said it is witnessing early signs of softening in few of the commodities like edible oils and packaging materials. Fresh milk, fuels, grains and green coffee costs are expected to remain firm with continued increase in demand and volatility.
The management of the company said milk products and nutrition category witnessed a double-digit growth across brands with Milkmaid leading the way. The confectionery category led by KitKat and Nestlé Munch performed with strong double-digit growth aided by media campaigns, attractive consumer promotions, trade inputs and focused distribution drives, it said.
The beverages category also recorded double-digit growth across channels. The foods category also continued its strong double-digit streak of growth, with improved market share in Maggi Noodles.
"We continued to see strong momentum in mega cities and metros, as well as strong acceleration across smaller town classes which reinforces the execution of our RURBAN strategy," said Narayanan. "We are also heartened by a smart uptick in sales in rural markets this quarter whichaugurs well for a credible momentum in future."
Nestle has been dealing with slowdown of sales in rural markets in recent quarters.
Nestle India said that its Board of Directors have approved the acquisition of the Pet Food Business from PURINA Petcare India Private Limited for Rs 123.5 crore. The integration of Pet Food Business with Nestle India is proposed with effect from October 1, 2022.