Nestle India net profit up 8% to ₹668 cr

In the year ago period, the maker of Maggi noodles and Kit Kat chocolates had posted a profit of ₹617 crore.

The packaged consumer goods company’s sales for the three months ended 30 September beat street estimates, posting sales of ₹4,567 crore, up 18% from the year-ago period, it said in a filing to the exchanges. Domestic sales grew 18.3% year-on-year.

Bloomberg estimates pegged Nestle India to post a profit of ₹685 crore with net sales of ₹4,364 crore.

The company is witnessing early signs of stability in the prices of a few commodities such as edible oils and packaging materials. Fresh milk, fuel, grain, and green coffee costs are expected to remain firm with continued increase in demand and volatility, it said.

Nestle India also announced the launch of its first ever direct to consumer platform, www.mynestle.in, in Delhi NCR. This will later be expanded to other parts.

“I am delighted to share that we have witnessed the highest sales growth during a quarter in the last five years. This achievement has been on continued strong volume and mix evolution with broad-based double-digit growth across all categories. Growth has been very strong in the large metros and mega cities and continued to be robust across smaller town classes including rural markets,” said Suresh Narayanan, chairman and managing director, Nestlé India.

Meanwhile, its gross margins contracted by 292 basis points (bps) year-on-year to 52.8%, because of higher prices of edible oil, milk and its derivatives, and packaging material.

“Lower employee cost (90 bps) as a percentage of sales helped to partially offset the raw material pressure while other expenses were higher (40 bps) because of an increase in fuel prices,” said Amnish Aggarwal, head of research, Prabhudas Lilladher.