New Delhi: Nestlé India Ltd reported a 5.2% drop in its March quarter net profit due to higher commodity costs, despite a rise in sales driven by its beverages and confectionery segments.
The company’s net profit fell to ₹885.41 crore in January-March, down from the ₹934 crore in the year-ago quarter. Its standalone revenue rose 3.6% year-on-year to ₹5,447.64 crore, it said in an exchange filing on Thursday.
Nestlé India, the Gurugram-based arm of the Swiss multinational food giant Nestlé, saw double-digit growth in beverages and confectionery during the quarter, with three out of four product groups delivering a healthy expansion.
“Our domestic sales crossed the ₹5,235 crore mark, the highest ever in any quarter, supported by improving volume growth,” said Suresh Narayanan, chairman and managing director of Nestlé India. “Penetration, premiumization and innovation combined with disciplined resource allocation have been key in driving growth. Since 2015 we have recalibrated and re-energized our product portfolio, by launching over 150 new products, contributing 7% of sales,” Narayanan said.
Nestlé sells brands such as Maggi, Nestlé A+ milk, Cerelac, Maggi sauces, KitKat and Nescafe in India.
Commenting on commodity prices, the company said coffee prices continued to be firm.
“Cocoa prices have corrected but continue to be high. Prices continue to remain stable for edible oils. Milk prices have cyclically firmed up with the onset of summers,” the company said in its earnings statement. Last quarter, the company had initiated price hikes on coffee and noodles.
In the fourth quarter, the average price of Arabica experienced a year-on-year increase of 97%, while the average price of Robusta rose by 65% compared to the same period in the previous year.
Cost of materials consumed as a percentage to sales increased from 43.3% to 44.3% for the quarter ended 31 March.
The company’s stock ended little changed at ₹2,434.80 on the BSE.
FY25 results
On Thursday, the company also announced its full-year earnings.
For the year ended 31 March, Nestlé India reported total sales of ₹20,077.5 crore, up 3.13% year-on-year. Profit grew 3.7% to ₹3,314.5 crore.
Powdered and liquid beverages were the largest growth contributors, with high double-digit growth during the year. Meanwhile, confectionery grew at a high single-digit pace both in value and volume, driven by its chocolate brand KitKat. India is the second-largest market for the brand globally.
Meanwhile, during the year, India continued to be the largest market worldwide for Maggi. The company’s prepared dishes and cooking aids business posted mid-single-digit growth in FY25.
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The company’s pet-care business reported high double-digit growth – the highest ever, since its integration into the Nestlé India business. It sells brands such as Purina.
“We are investing approximately ₹6,500 crore between 2020 and 2025 to develop new capabilities and capacity. This not only demonstrates the strong demand for our products but also our commitment to manufacture in India and ‘Make in India’. The Odisha factory, our 10th citadel of growth, is being set up with an initial investment of approximately ₹900 crore, in its first phase, to manufacture products from our foods (prepared dishes and cooking aids) portfolio,” Narayanan added.
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