Nestlé India delivers double-digit growth in FYQ2 results

FMCG major Nestlé India has posted a net profit of Rs 698.3 crore in the second quarter of 2023 ending June, showcasing a rise of 36% in its net profits over the same period last year. The company follows a January to December financial year. It had posted a net profit of Rs 510.24 crore in the April-June quarter in 2022.

In the previous quarter ending March, it posted a profit of Rs 737 crore, marking a fifth quarter in a row of double-digit growth across all product groups.

Commenting on the results, Suresh Narayanan, chairman and managing director, Nestlé India said, “I am pleased to share that we have, yet again, delivered robust performance, with all product groups registering double-digit growth. This is the fifth quarter in a row of double-digit growth. Domestic sales growth is broad-based and grew by 14.6%, on the back of prudent pricing and supported by mix and volume with targeted brand support. Key brands continued to perform well, led by Kitkat, Nescafe, and Maggi among others.”

The out-of-home business continued to deliver strong growth this quarter, through a pivot of dual strategies in terms of portfolio transformation and precise execution of differentiated channel and geography plans to harness big growth opportunities.

“Our RURBAN strategy was helped by increasing the distribution footprint with relevant portfolios, thereby achieving higher penetration. We witnessed strong growth across metro cities, robust performance in Tier 1 to 6 towns, and continued strength in rural markets. eCommerce continued to perform strongly and now accounts for almost 6.5% of sales. We have renewed and indeed accelerated our focus on brand building and continued to make relevant investments during this quarter,” Narayanan adds.

The focus on innovation and renovation drove Nestle India to launch three new products in the Indian market – Resource Fiber Choice- a gut health solution that is said to help relieve constipation and improve gut health, Everyday Zero – the dairy whitener with no added sugar and Munch breakfast cereals. 

Nestlé expands in Odisha

Narayanan said, “Make in India has always remained the cornerstone of our industrial footprint strategy and I am pleased to announce that Odisha has been identified as the state that will be home to Nestlé India’s tenth factory. We have now received an in-principle approval from Industrial Promotion & Investment Corporation of Odisha Limited (IPICOL). Our dream and ambition also include making the Odisha factory a state-of-the-art facility in line with our continuing commitment to gender diversity, sustainable manufacturing, paperless digitally managed facility with an abiding focus on the environment in terms of practices. Like all our other factories, Odisha factory too will remain committed to serving the local communities through relevant societal initiatives.” 

According to Narayanan, dignity, respect, and equal opportunity are enshrined in the pillars of purpose and values of Nestlé India. “It gives me immense pride to share that we have recruited 12 employees with disabilities to work on our production line at our Sanand factory. We remain committed to the path of diversity and inclusion in various parts of our business with the necessary commitment and resources to propel such initiatives. I would like to thank our diverse team who make ‘performance with pride’ happen at Nestlé India with diligence, commitment, ethics, teamwork, compassion, and humility, and appreciate our employees, partners, suppliers, distributors, and retailers for their unwavering faith and wholehearted support in our company’s journey in the past decades.”  

Financial Highlights – Q2 2023:

∙ Total Sales of INR 4619.5 Crore 

∙ Total Sales Growth at 15.0 %. Domestic Sales Growth at 14.6%. 

∙ Profit from Operations at 20.7% of Sales 

∙ Net Profit of INR 698.3 Crore 

∙ Earnings Per Share of INR 72.43 

Business Comments – Q2 2023:

∙ eCommerce: The channel contributed to 6.5% of the quarterly sales and continued the growth momentum driven by quick commerce. 

∙ Organized Trade: The channel continued delivering strong broad-based growth across categories driven by store expansion and improved footfalls 

∙ Out of Home (OOH): Continued to deliver robust growth through premiumization and portfolio transformation initiatives. Strong performance is an outcome of kiosk expansion and prioritization of emerging channels.

∙ Exports: Registered double-digit growth across all categories through a proliferation of products such as Nescafe Sunrise and Polo

Product Groups Performance – Q2 2023 (Domestic):

∙ Prepared dishes and cooking aids: Registered double-digit growth driven by Maggi noodles and aided through distribution expansion and impactful consumer activations.  

∙ Milk products and nutrition: Delivered double-digit growth despite inflationary pressures. Growth was driven by Milkmaid and Peptamen. The growth was further aided by the launch of Resource Fibre Choice and Everyday Zero with no added sugar. 

∙ Confectionery: Double-digit growth was led by Kitkat and Munch. Performance was supported by strong consumer engagement and media campaigns. 

∙ Beverages: The product group registered double-digit growth led by greater household penetration of Nescafe Classic, Nescafe Sunrise, and Nescafe Gold for both hot and cold coffee occasions. Nescafe continued the journey of innovation, with the launch of the cold coffee premix Nescafe all-in-one frappe. 

∙ Petcare Business: Continues to provide complete nutrition for cats and dogs. Felix has received positive feedback from trade and pet owners.