New Delhi: Nestle India Ltd, the local unit of the world’s biggest food company, on Friday reported a 15.88% rise in net profit for the quarter ended 31 December to 326.3 crore as the maker of Maggi noodles and Kit-Kat chocolates experienced a revival in sales volumes after nearly 10 quarters of muted growth.

Net sales increased 11.7% to 2,516.1 crore from 2,252.3 crore in the year-ago period. Local sales grew 11.3%, helped by better price realisations and volume growth in some product categories.

Revenue from exports to affiliates bolstered the company’s profit, as the segment saw a 17.9% increase in revenue, contributed largely by shipments of milk and nutrition products to Bangladesh.

“We have delivered on both top and bottom line", said Etienne Benet, managing director, who completes two years as head of the India business in March.

The company unveiled a change in product strategy a year ago, increasing investments behind some brands, to revive demand. Demand had slumped in the wake of a decline in economic growth, rising inflation and a consequent drop in consumer spending.

Benet’s appointment also brought about a slew of changes as Nestle India sought to improve its product mix, lift the visibility of its brands on shop shelves and launched new products to compete better in the local market.

For the full year ended 31 December, the Gurgaon-based company reported a 6% rise in net profit to Rs.1,184.7 crore from Rs.1,117.1 crore in the previous year. Net sales jumped 8.2%, to Rs.9,806.3 crore. Net domestic sales rose 8.6% mainly because of better price realisations. Exports grew by 2.9%.

Cost of materials consumed went up by 14% during the year on account of significantly higher cost of milk and its derivatives which were even more expensive in India than in the international markets. These have not been fully passed on to local consumers, the company said.

“There has been a constant recovery in Nestle’s domestic sales over the past two quarters and it’s only accelerating, clearly the company’s innovations are working," said Abneesh Roy, associate director of institutional equities research at Mumbai-based Edelweiss Securities Ltd.

Over the past 12-to-18 months, the company has beefed up its confectionery portfolio with the launch of more premium chocolates such as Kit-Kat Senses and Alpino apart from launching more expensive variants of its power brand Maggi. The company also spent more to advertise and promote its brands.

Benet maintained that the company would adopt a similar stance this quarter, too, stating that “we remain focused on value-up portfolio management and are continuing to reshape the portfolio and communication to strengthen our leadership as a nutrition, health and wellness company".

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