Nestle India Chairman & Managing Director Suresh Narayanan said on Thursday that going forward, the FMCG major will not like to go for price increases wherever it can. The company’s call on price increase will depend on the commodity prices, as coffee, which is up 60-70% and is “very difficult to manage”, he added.
The board of Nestle India approved the issuance of bonus equity shares in the ratio of 1:1 to its existing shareholders on Thursday. This is the first bonus issue after the year 1996, with subdivision of shares and NSE listing in 2024.
The outgoing CMD stated that commodity inflation, which impacted volume growth in the last few quarters, is coming down as prices are stabilising but the upcoming quarters should see things returning to normal.
However, commodities like coffee, cocoa remain at "decadal highs and that clearly puts an enormous amount of pressure in terms of managing the penetration-led growth and the bottom line (margins) of the company," said Narayanan, while addressing his last Annual General Meeting (AGM) for Nestle India.
Narayanan, who addressed his 10th Nestle India AGM as Chairman, will retire on July 31, 2025 after serving 26 years, while Manish Tiwary, former Country Manager of Amazon India, will get the baton from August 1, 2025, as per the succession plan announced last year.
He said that to mitigate the impact of food inflation, Nestle India took a series of cost-saving and efficiency initiatives. It also initiated price hikes, in a "responsible manner" to ensure that the volume is not impacted and category rules remain. “There have been short-term pressures... But hopefully, we will be getting back to the normal stride in the coming quarters and months,” he said. Narayanan added that the commodity inflation clearly has “cast its shadow on the overall evolution of the company's volume”.