Nestle India Ltd

Revenue from operations rose 9.05% year on year to Rs 5267.59 crore in the quarter ended 31 March 2023.

The company had earlier informed the exchanges about changing the financial year from “1st January - 31st December” cycle to “1st April - 31st March” cycle. Accordingly, the current financial year of the company stands extended up to 31 March 2024, covering a period of 15 months commencing from 1 January 2023 to 31 March 2024, comprising five quarters.

Total sales increased by 9.28% YoY to Rs 5,254.43 crore in the January-March 2024 period. During the quarter, domestic sales grew by 8.86% and export sales rose 15.96%.

Profit before exceptional items and tax was at Rs 1,240.50 crore in the March quarter, up 25.24% from Rs 990.46 crore posted in January-March quarter 2024.

The company recognized an exceptional item of Rs 10.08 crore for the quarter ended 31 March 2024. This partially reverses a one-time expense of Rs 107.30 crore recorded in the December 2023 quarter due to changes in the cost of servicing the company's pension plan. This reversal reflects the transfer of responsibility for making monthly pension payments to an insurance service provider.

Suresh Narayanan, chairman and managing director of Nestlé India, said, “I am pleased to share that we have delivered double-digit growth, despite challenges posed by rising food inflation and volatile commodity prices. We have witnessed a strong growth momentum across our product portfolio led by a combination of pricing and mix. Our domestic sales crossed Rs 5,000 crore this quarter.

In the financial year ended 31 March 2024, confectionery delivered strong performance, fuelled by KITKAT, making India the second-largest market for the brand globally. Our Beverages business recorded robust performance. NESCAFÉ has introduced its coffee to over 30 million households in India in the last 7 years. Milk Products and Nutrition witnessed strong growth despite inflationary pressures. Prepared dishes and cooking aids registered strong growth across portfolio led by MAGGI Noodles and MAGGI Masala-ae-Magic. India emerged as the largest market worldwide for MAGGI.

The Out-of-Home business reported strong growth and e-commerce sustained its upward trajectory, contributing to 6.8 % of sales. We remained steadfast on our RUrban journey and expanded to encompass over 200,000 villages, marking a significant milestone in our journey.

The pursuit of new platforms and categories is a key component of Nestlé India's overall growth strategy and reflects our commitment to anticipating and responding to evolving market trends and consumer preferences.”

Meanwhile, Nestle India’s board has approved the execution of a definitive agreement to form a joint venture between the company and Dr. Reddy’s Laboratories to bring together the well-known global range of nutritional health solutions as well as vitamins, minerals and health supplements of Nestlé Health Science with the nutraceuticals portfolios, strong and established commercial strengths of Dr. Reddy’s in India and other geographies. The joint venture is expected to become operational in the second quarter of the financial year 2024-25, subject to customary closing conditions.

The joint venture company would be formed with Dr Reddy’s holding 51% and Nestlé India’s holding 49%. Nestlé India will have a call option to increase shareholding upto 60% after six years at a fair market value. Dr Reddy’s shall continue to hold at least 40% of the shareholding after the company exercises its call option, it added.

On its commodity outlook, the company stated, “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. Milk prices expected to rise on account of expected harsh summer.”

Further, the firm's board has recommended a final dividend of Rs 8.50 per equity share for FY2024. The record has been fixed on 15 July 2024.

Nestlé is the world's largest food and beverage company. It manufactures internationally famous brand names such as Nescafé, Maggi, Milkybar, Kit Kat, Bar-One, Milkmaid and Nestea.

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The Board of Nestle India at its meeting held on 25 April 2024 has approved the launch of Nespresso in India wherein the Company will engage in the sale and distribution of Nespresso products (machines and capsules) through its distribution network, online channels, and boutiques under commercial arrangements with Nespresso and third parties. The Company expects to launch Nespresso in India by the end of 2024.

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Net profit of Nestle India rose 26.82% to Rs 934.17 crore in the quarter ended March 2024 as against Rs 736.64 crore during the previous quarter ended March 2023. Sales rose 9.28% to Rs 5254.43 crore in the quarter ended March 2024 as against Rs 4808.40 crore during the previous quarter ended March 2023.

For the full year,net profit rose 64.52% to Rs 3932.84 crore in the year ended March 2024 as against Rs 2390.52 crore during the previous year ended December 2022. Sales rose 44.59% to Rs 24275.48 crore in the year ended March 2024 as against Rs 16789.53 crore during the previous year ended December 2022.

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Nestle India announced that the 65th Annual General Meeting (AGM) of the company will be held on 5 July 2024.

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Nestlé India and Dr. Reddy's Laboratories announced that they have entered into a definitive agreement to form a joint venture to bring innovative nutraceutical brands to consumers in India and other agreed territories.

The partnership will bring together the well-known global range of nutritional health solutions as well as vitamin, minerals, herbals and supplements of Nestlé Health Science (NHSc) with the strong and established commercial strengths of Dr. Reddy's in India.

The joint venture will help JV Partners combine their strengths and grow their complementary nutraceuticals portfolios in categories such as metabolic, hospital nutrition, general wellness , women's health and child nutrition for consumers across India. The JV Company will be headquartered in Hyderabad. The JV Company will leverage the capabilities as well as services of the Nestlé Group and Dr. Reddy's.

Select brands will be licensed by the JV Partners to the JV company. The Nestlé Group will license brands such as Nature's Bounty, Osteo Bi-Flex, Ester-C, Resource High Protein, Optifast, Resource Diabetic, Peptamen, Resource Renal and Resource Dialysis. Dr. Reddy's will license brands such as Rebalanz, Celevida, Antoxid, Kidrich-D3, Becozinc in the nutrition, and OTC segments. The JV Company is expected to become operational in Q2 of FY'25.

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Nestle India announced that the Board of Directors of the Company at its meeting held on 25 April 2024, has recommended a Final dividend of Rs.8.50 per share (i.e.850%), subject to the approval of the shareholders.

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In a joint investigation between Public Eye and International Baby Food Action Network (IBFAN) sent baby food samples in Asia, Latin America, and Africa from Nestle to a testing laboratory in Belgium. The study said that Nestle added the sugar equivalent to an average of 4 gram per sugar cube in wheat-based cereals, Cerelac. It is made for children aged between six months and two years.

The same product is being sold with no added sugar in Germany and the UK, while in Ethiopia and Thailand, it contains nearly 6 grams, the study said.

The said finding raised concern about the FMCG major’s adherence to international guidelines aimed at curbing obesity and chronic diseases.

Nestlé is the world's largest food and beverage company. It manufactures internationally famous brand names such as Nescafé, Maggi, Milkybar, Kit Kat, Bar-One, Milkmaid and Nestea.

The FMCG major's net profit increased 4.39% to Rs 655.61 crore on 8.07% rise in total revenue from operations to Rs 4,600.42 crore in Q4 CY23 over Q4 CY22. Total sales increased by 8.28% year on year to Rs 4,583.63 crore in the fourth quarter of 2023. During the quarter, domestic sales grew by 8.86%, while export sales fell and 5.59%.

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Nestle India Ltd is up for a fifth straight session today. The stock is quoting at Rs 2560.1, up 0.25% on the day as on 12:44 IST on the NSE. The benchmark NIFTY is down around 0.68% on the day, quoting at 22120.65. The Sensex is at 72856.91, down 0.74%. Nestle India Ltd has slipped around 0.78% in last one month.

Meanwhile, Nifty FMCG index of which Nestle India Ltd is a constituent, has slipped around 1.05% in last one month and is currently quoting at 53174.95, up 0.32% on the day. The volume in the stock stood at 4.09 lakh shares today, compared to the daily average of 10.64 lakh shares in last one month.

The benchmark April futures contract for the stock is quoting at Rs 2562.9, down 0.01% on the day. Nestle India Ltd is up 26.46% in last one year as compared to a 24.93% jump in NIFTY and a 14.25% jump in the Nifty FMCG index.

The PE of the stock is 81.92 based on TTM earnings ending December 23.

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Nestle India announced the retirement of Dr Swati Ajay Piramal (DIN: 00067125) as an Independent Non-Executive Director of the Company on 31 March 2024 upon completion of her second term of five consecutive years.

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Nestle India will hold a meeting of the Board of Directors of the Company on 25 April 2024.

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