July 25, 2024
New Delhi, India
Q1 Results
Nestle India reported a net profit of ₹746.6 crore in the first quarter of FY25, marking a growth of 7% from ₹698.3 crore in the year-ago period. The FMCG major’s revenue for Q1 FY25 increased by 3.3% to ₹4,814 crore from ₹4,658.5 crore year-on-year (YoY).
Quarterly Performance:
- Net Profit and Revenue: Nestle India’s net profit for Q1 FY25 rose 6.9% YoY to ₹746.6 crore from ₹698.3 crore, slightly missing the analyst estimates.
- Dividend Declaration: Earlier, on July 8, the Nestle India Board of Directors declared an interim dividend of ₹2.75 per share for the current financial year 2024-25, amounting to ₹265.14 crore. This dividend will be paid on August 6 along with the final dividend of ₹8.5 for the financial year ended March 31, 2024.
Market Reaction:
Nestle India shares fell after the quarterly results, trading at ₹2,518, down 1% from the previous close. At 11:45 am, shares were trading −2.42% lower at ₹2,481.90I apiece.
Management Commentary:
“Despite external challenges such as lower consumption growth, concerns on continued food inflation, and volatile commodity prices, we have delivered growth across our product groups. Almost a fourth of our growth has been mix and volume led, and we hope to strengthen this trend in the coming months,” said Suresh Narayanan, Chairman and Managing Director, Nestlé India.
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Operating Performance:
At the operating level, Nestle India reported earnings before interest, tax, depreciation, and amortization (EBITDA) growth of 4.3% at ₹1,103 crore in the quarter ended June 2024 compared to ₹1,058.8 crore in the year-ago period. The EBITDA margin increased by 20 basis points (bps) to 22.9% from 22.7% YoY.
Commodity Price Impact:
“Commodity prices are seeing unprecedented headwinds in coffee and cocoa with all-time high prices and an ongoing price rally. Cereals and grains are going through a structural cost increase backed by MSP. There is relative stability in milk prices, packaging, and edible oils,” Nestle India said.
Despite facing challenges such as lower consumption growth, food inflation, and volatile commodity prices, Nestle India has managed to deliver growth across its product groups. The company continues to focus on mix and volume-led growth, aiming to strengthen this trend in the coming months.
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