- Thursday, October 17, 2024
However, Nestle’s revenue from the sale of products was up 1.3 per cent in the September quarter
By: Shajil Kumar
FMCG major Nestle India Ltd on Thursday reported a marginal decline of 0.94 per cent in its net profit at ₹8.99 billion (£82.27m) for the second quarter that ended September 2024 as some of its key brands faced softer consumer demand and high commodity prices.
The company had posted a net profit of ₹9.08 billion (£83.09m) in the July-September period a year ago, according to a regulatory filing from Nestle India.
However, Nestle India’s revenue from the sale of products was up 1.3 per cent to ₹50.74 billion (£464.33m) in the September quarter, up from ₹50.09 billion (£458.38m) in the corresponding period of last fiscal.
Commenting on the results Chairman and Managing Director Suresh Narayanan said, “Despite a challenging external environment with muted consumer demand and high commodity prices, especially for coffee and cocoa, we remained resilient in our pursuit to deliver growth.”
“This quarter, 5 of our top 12 brands grew at double-digit. However, some key brands witnessed pressure due to softer consumer demand and we focus on them and have in place robust action plans,” he said.
Nestle India’s domestic sales were up 1.23 per cent to ₹48.83 billion (£446.85m), as against ₹48.23 billion (£441.36m) in the corresponding July-September period.
In the domestic market, Nestle India delivered growth in organised trade, which includes retail chains, hypermarkets etc “spurred by noodles, beverages and overall premiumisation,” according to an earning statement by the company, which owns brands like Maggi, Nescafe, KitKat and Milkmaid etc.
Similarly in the Out of Home (OOH) segment, Nestle India has a “robust growth” helped by portfolio transformation, premiumisation, new customer acquisition and driving reach beyond metros.
“Our Out-of-Home business continues to be one of our fastest growing businesses with strong double-digit growth,” said Nestle India adding that while in e-commerce, Nestle India has accelerated growth by almost 38 per cent. This was “primarily driven by Quick Commerce and fueled by brands such as Kitkat, Nescafe, Maggi and Milkmaid.”
“E-commerce delivered high double-digit growth, which was the highest in the last seven quarters contributing to 8.3 per cent of domestic sales,” it said.
Growth on this new age channel was also supported by premiumisation, new user acquisition, festive participation and targeted digital communications.
Its petcare business Purina also witnessed a strong e-commerce momentum, it added.
“Felix and Friskies cat food continued to receive positive feedback from trade and cat parents. Building on the superpremium pillar, Pro Plan dog food witnessed strong growth,” said Nestle India.
Its revenue from exports was also up 3.13 per cent to ₹1.91 (£17.48m) in the September quarter.
Its export business “continued to expand its footprint by introducing new SKUs across categories to Canada, Middle East, Maldives and Papua New Guinea,” it said.
Over the outlook, Nestle India said “Commodity prices remain elevated especially for coffee and cocoa, with prices of cereals and edible oils also being accentuated with recent developments.”
However, it added there is relative stability in milk prices and packaging so far. (PTI)
