NEW DELHI: Fast moving consumer goods company Nestle India on Tuesday reported a 9.2% jump in net profit for quarter ended March 31, 2019 at ₹463.2 crore up from ₹424 crore it reported in the year ago period.
Revenue from operations were up 9% for the quarter at ₹3003 crore up from ₹2757.24 crore in the corresponding year.
Nestle India follows a January-December year for accounting.
During the quarter the company faced headwinds on account of higher input costs.
"Nestle saw gross margin compression after five quarters as gross margins dipped by 57bps YoY. This was due to some inflationary pressure in commodities such as milk, we expect tactical pricing actions from Nestle to counter inflationary pressures," Jefferies analyst Varun Lohchab said in a note dated May 14.
“We have continued on the track of volume led growth with our iconic brands like Maggi, Kitkat and Munch delivering strong performances. The market momentum remained strong, while the input costs have witnessed hardening," Suresh Narayanan, chairman and managing director, Nestlé India said in a statement.
Nestle's results come as somewhat of a relief amid a rural slowdown as reported by most other consumer goods firm in the March quarter.
That’s because compared to other firms such as Dabur and HUL, Nestle's exposure to rural markets is less. “Nestle saw strong domestic sales growth of 10.2% which was volume led Nestle grew ahead of HUVR during the quarter...contrary to the commentary of other consumer goods companies, Nestle highlighted that market momentum remains strong," Lohchab added.
For the quarter, domestic sales at Nestle India increased by 10.2% supported by volume growth; while export sales declined 8.9% due to lower coffee exports to Turkey, the company said.
The company also announced that it plans to expand its products portfolio in to the organic foods market within categories such as milk and nutrition products. These launches will happen over the next coming months, the company said in its statement.
On Tuesday, shares of Nestle India were down 0.99% to close at ₹10214.70 on the BSE.
This story has been published from a wire agency feed without modifications to the text.