Nestle India profit up 10% in June quarter on higher sales
New Delhi: Nestle India Ltd, the local arm of the Swiss food company, on Wednesday reported a 9.7% increase in net profit for the June quarter, backed by higher sales in the domestic market.
Profit stood at Rs263.43 crore, against Rs240.22 crore a year ago. Domestic sales rose 8.8%, while overall sales, including exports, rose by 7.3% to Rs2,469.06 crore from Rs2,301.11 crore a year ago.
With lower sales of milk and nutrition products in Bangladesh and West Asian countries, Nestle India’s exports fell 12% during the quarter.
Higher growth in domestic sales was “mainly due to increase in volumes supported by new product launches and rebuild of Maggi” instant noodles, supplemented by better realisations, the company said in a statement. “Growth was negatively impacted by softer trading in June ahead of the rollout of goods and services tax (GST),” it added.
“I am pleased with the momentum on ‘volume led’ growth during the quarter, which is at the core of the Nestlé strategy that we have defined. An energized Maggi noodles business, encouraging responses to our new product innovation and renovation and growth across most categories, defined our performance,” Nestle India chairman and managing director Suresh Narayanan said in the statement.
During the quarter, Nestle India’s expenses rose 9.4% due to the increase in commodity prices, reflecting in an 8.4% rise in material cost. The company, Narayanan added, had faced “softer trading conditions in June prior to the introduction of GST with trade destocking and postponing purchases”. However, he said the company has managed a smooth transition.
Nestle India’s shares closed at Rs6,787.30 per share, down 0.43%, on the BSE, on a day the benchmark Sensex ended 0.48% up at 32,382.46 points. The results were announced after close of trading.
(Nestle India follows January-December year for accounting)