Nestle India's March quarter net profit up 13.5% at ₹525 crore2 min read . Updated: 12 May 2020, 08:10 PM IST
- Revenue from operations during the quarter rose 10.7% at ₹3,325.27 crore
- Export sales increase by 12.9% during the quarter
NEW DELHI : Nestle India Ltd on Tuesday reported a 13.5% jump in net profit for the March quarter at Rs525.43 crore up from Rs462.7 crore it reported in the year ago period.
Revenue from operations during the quarter ended March 31 was up 10.7% at Rs3,325.27 crore from the Rs3,002.9 crore in the year ago period. The maker of Maggi noodles and Nescafe coffee reported a 10.7% jump in domestic sales for the quarter at Rs3,124.2 crore helped in part by the initial stockpiling of packaged foods during the first phase of India's lockdown.
Export sales increased by 12.9% during the quarter. To be sure, Nestle India follows a January-December year for accounting.
“Our company remained resilient in the first quarter, as the numbers indicate, and delivered volume and mix led growth. Maggi, Kitkat and Nestlé Munch delivered strong performances," said Suresh Narayanan, chairman and managing director, Nestlé India said in a statement to the press. Contribution from e-commerce went up significantly during the quarter, he added, while the out of home sector performance was subdued. "Commodity prices for milk and its derivates continued to be on the rise during the quarter," he said.
Analysts who track the sector said the company’s results were well ahead of street expectations. The results also exceeded “peer set driven by panic buying of food items," Abneesh Roy of Edelweiss Securities said on Tuesday.
The company’s results come at a time when India's fast moving consumer goods sector has been through a period of disruption as covid-19 induced lockdowns prompted several companies to temporarily suspend operations, and shutter warehouses—a move that created supply gaps in the market. This was especially true for packaged foods, and other essential items.
On March 24, Nestle had said that operations in some of the company's locations (manufacturing, distribution centres and warehouses, offices, suppliers) were scaled down or suspended in view of the lockdown. This had impacted supplies of some of Nestle’s popular brands.
However, on April 21, the company said that all its manufacturing locations in the country received a nod to operate, albeit at scaled down levels.
Narayanan added that the company has worked to ensure food and beverage products are available to consumers and communities throughout the country. "We are very thankful to the authorities at all levels of government for timely interventions, guidance and support. Our people, in particular, our frontline workforce, have shown extraordinary commitment in keeping our operations running and meeting consumer needs under tough challenges."
“We will continue to adapt quickly to changing consumer needs and to challenges across the supply chain," he said.
Narayanan added that the company will honor all summer internships, and ensure that all management trainees join on time. "Every new employee contract respected and every employee has received their full salaries, bonuses and other benefits," he said.
The results come after the company's Swiss parent reported its best quarterly sales growth in nearly five years, Reuters reported last month, as the company benefitted from consumers in America and Europe buying more of the its frozen and pet food brands.