Food and beverage company Nestle India has reported a 10.7 percent year-on-year growth in profit for the quarter ended June 2021, driven partly by low base and better sales growth, but numbers missed analysts’ expectations.
Net profit increased to Rs 538.5 crore in Q2CY21, from Rs 486.6 crore in the year-ago quarter. The June 2020 quarter was impacted by nationwide lockdown to control the spread of virus.
The company which follows January-December as its financial year, said revenue from operations grew by 14 percent to Rs 3,476.7 crore compared to corresponding quarter last fiscal.
“Total sales and domestic sales for the quarter increased by 13.8 percent and 13.7 percent respectively, on a base impacted by Covid-19 induced lockdown with production disruptions across factories,” said the company.
“Domestic sales growth was driven by volume & mix. Export sales increased by 17.7 percent due to timing of exports to affiliates,” it added.
At the operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 13.4 percent year-on-year to Rs 848 crore, but margin declined by 10 bps to 24.4 percent in Q2CY21, could be due to rising commodity prices across oils and packaging materials.
The profit was estimated at Rs 582 crore on revenue of Rs 3,565 crore and EBITDA was expected at Rs 887 crore with margin at 24.9 percent for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.
Key products MAGGI Noodles, KITKAT, Nestlé MUNCH, MAGGI Sauces, and MAGGI MASALAAE-MAGIC posted strong double-digit growth, said Nestle India, adding strong performance was seen in E-Commerce channels, growing by 105 percent and contributed 6.4 percent of domestic sales.
Last year, the company committed to invest Rs 2,600 crore over a 3-4-year period in India. “Out of this, we have already invested about Rs 1,000 crore thus far. This is a vindication of our confidence and trust in the Nestlé journey in India,” said Suresh Narayanan, Chairman and Managing Director.
Nestle has decided to disinvest its entire minority stake of 19.98 percent in Sahyadri Agro and Dairy (formerly known as Indocon Agro and Allied Activities), a company engaged in milk collection business in western India, due to change in the business scenario.
News Source: Moneycontrol