NEW DELHI: Riding on the spike in home consumption, FMCG major Nestle India on Tuesday reported a net profit of Rs 602.25 crore for the quarter ended March 31, up 14.6 per cent, compared to Rs 525.43 crore in the corresponding quarter of the previous fiscal. The maker of Maggi noodles follows the January-December period as the financial year.
During the quarter under review, the company’s revenue from operations stood at ₹3,610.82 crore, up 8.6 per cent. Domestic sales achieved double-digit growth of 10.2 per cent, on a strong growth base in Q1 2020 largely driven by volume and mix. “As the pandemic rages on, the quarter gone by has been another test of resilience of my team and our partners.
Key products like Maggi Noodles, Kitkat, Nescafé Classic, Maggi Sauces, Milkmaid, Maggi Masala-Ae-Magic, among others, delivered robust performance and achieved double-digit growth,” said Suresh Narayanan, chairman and managing director at Nestle India. During the quarter, sales from e-commerce channels grew by 66 percent year-on-year and contributed an unprecedented 3.8 per cent towards its domestic sales.
“Nestle India reported strong first quarter results with overall numbers marginally ahead of our expectations,” said Abneesh Roy, Executive Vice President, Edelweiss Securities. “The good part was both gross margins and EBITDA margins expanded strongly. This is a very rare feat during the quarter for consumer companies, most companies will see a gross margin compression,” he said.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) margin or operating profit saw expansion of 168bps and gross margin expanded by 223bps year-on-year. In the case of out-of-home channels, demand improved further but it continues to be impacted by the Covid-19 pandemic.
Similarly, exports continued to disappoint, falling 12.9 per cent over the previous year. Meanwhile, the company pointed out that recent “sharp escalations” in key raw material prices is posing a challenge. It specially pointed out the headwinds in commodity and packaging materials.
‘Stocked adequately’
Britannia Industries CEO Varun Berry on Tuesday said that the company has stocked its distributors adequately to meet any potential surge in demand. It has also implemented a new real-time dealer management to ensure quick conversion of orders.