Nestle India on Thursday reported a 6.5% year-on-year decline in its consolidated net profit to Rs 873.46 crore for the January-March quarter, primarily due to elevated commodity costs. Despite the dip, the profit figures were in line with market expectations. According to Bloomberg consensus estimates, the net profit was projected at Rs 873 crore.
Revenue from operations rose by 4.4% to Rs 5,503.8 crore, slightly missing the estimated Rs 5,512 crore. The company’s operating performance remained steady, with Ebitda growing 2.9% year-on-year to Rs 1,389 crore. However, the Ebitda margin narrowed marginally to 25.2% from 25.6% a year ago.
The company registered a volume growth of 2% during the quarter. It said that prices of key raw materials such as coffee and cocoa, essential ingredients in its Nescafe beverages and KitKat chocolates, have remained elevated. Additionally, milk prices have firmed up with the onset of summer, adding further pressure on input costs.
Urban demand has continued to face headwinds due to high living expenses and muted wage growth. Despite these challenges, the company reported double-digit growth in its beverages and confectionery segments, with three out of four product groups registering healthy performance. Other categories, including milk products, petcare, and out-of-home consumption, also contributed to the overall growth.
To widen its market reach, Nestle India has been expanding its distribution network and has introduced specially designed e-commerce packs to boost its online sales.
The board has declared a dividend of Rs 10 per share, with the payout scheduled for July 24. Manish Tiwary, former country manager at Amazon India, who has been appointed as a key management personnel and will take over as managing director from August 1. Additionally, the tenure of PR Ramesh as an independent non-executive director has been extended for five years until June 30, 2030.