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Nestlé India Ltd.’s fourth-quarter earnings rose but missed estimates.
Instant noodle maker Maggi’s net profit, tracking calendar-year financial reports, rose 4% from a year earlier to Rs 655.6 million in the three months ended December, according to its exchange filing. That compares with the analyst consensus estimate tracked by Bloomberg of Rs 746.84 crore.
The company incurred a one-time loss of Rs 107.3 million due to change in service cost of defined pension benefit, which affected quarterly profit. Profit before exceptional items and taxes stood at Rs 993.78 crore.
Nestlé India will now follow the financial year from April 1 to March 31, instead of January to December. The company’s current fiscal year will be extended to March 31, 2024, covering a 15-month period from January 1, 2023 to March 31, 2024.
Nestlé India Key Highlights for Q4FY23 (YoY)
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Revenue rose 8.1% to Rs 4,600.42 crore (Bloomberg estimate: Rs 4,708.9 crore).
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Ebitda grew 13% to Rs 1,095.12 crore (Bloomberg estimate: Rs 1,122.35 crore).
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The margin stood at 23.8% versus 22.9%, exactly in line with estimates.
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The cost of raw materials consumed fell by 1.4% to Rs 2,006 crore.
During the quarter, Nestlé India’s domestic sales rose 8.9% year-on-year to Rs 4,421.8 crore, while exports fell 5.6% to Rs 171.4 crore.
Domestic sales grew on the back of pricing and mix, with strong growth momentum in e-commerce and out-of-home channels, Suresh Narayanan, president and managing director, Nestle India, said in a statement.
E-commerce contributed to 7% of domestic sales this quarter.
For calendar year 2023, the company’s total sales increased by 13.3% over last year and crossed the Rs 19,000 crore mark.
All key brands have contributed to Nestle India’s consistent growth trajectory, Narayanan said.
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Beverages experienced double-digit growth. Nescafé gained significant market share and increased its household penetration.
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The dairy and nutritional products group recorded double-digit growth.
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Prepared meals and culinary auxiliaries maintained “creditable” growth.
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Confectionery, one of Nestlé’s strong growth drivers, led by Kitkat and Munch, generated good growth.
Sharing its perspective on commodity trends, Nestle India said coffee prices continue to be volatile and historically high due to limited availability.
Commodities such as wheat and rice are holding steady for the time being, with healthy winter milk growth expected to keep prices stable.
However, the rainfall deficit is expected to affect the production of maize, sugar, oilseeds and spices, which will affect prices.
Nestlé India has been expanding its reach in small cities and towns, a strategy it calls “rurban”. The company has added 5,300 villages this quarter, now reaching a total of over 1.96 lakh villages.
“We are very pleased with the growth in sales in our rural markets, which has continued despite the challenging environment,” Narayanan said.
The board of directors approved a third interim dividend of Rs 7 per share, worth Re 1 each for FY 2024. This is equivalent to Rs 674.91 crore, to be paid from March 5, 2024 .
The company’s shares closed 1.68% higher after the results were declared, compared to an overall flat Sensex.