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Nestle Results: Nestle India Quarterly Results for Q2 (2021-22) & News

Nestle Results: Nestle India Quarterly Results for Q2 (2021-22) & News

Last updated: 21 Oct, 2021 | 08:41 am

Nestle Results: Nestle India Quarterly Results for Q3 (2021-22) & News

Profit below estimates: Nestle India has reported a 14.6% increase in net profit sequentially to Rs 617.4 crore in July-September 2021 period, missing street estimates. Analysts had earlier estimated a net profit of about Rs 634.2 crore. Profit rose by 5.15% on a yearly basis. The profit increased as demand for out-of-home consumption categories and ready-to-eat products saw a revival.

Rise in Revenue: Revenue rose 11.7% sequentially and stood at Rs 3,882.6 crore, against Rs 3890.8 crore estimated by analysts. The revenue increased on the back of an increase in domestic sales that rose 11.5% sequentially and exports that grew 12.9%. The domestic sales and exports grew to Rs 3,687.35 crore and Rs 177.6 crore, respectively. On a yearly basis revenue rose by 9.6%.

Margins contract: Nestle’s EBITDA margin contracted to 24.4% on a year-on-year basis amid rising costs of packaging materials, rising fuel and transportation costs and supply constraints. Operating profit rose 11.8% on quarter to Rs 948 crore, compared with the estimated Rs 957.1 crore. The total expenses increased 10.48% on year to Rs 3,081.99 crore compared to Rs 2,789.67 crore due to rising commodity prices.

Key brands grow: The company saw prominent growth for Maggi Noodles and Maggi Masala. The growth of Maggi Sauces was muted because of high competition and lower demand by retail customers. Maggi noodles and Polo have been recently introduced in the Middle East market, while Crunch Wafers have been launched in ASEAN markets. Brands like Kitkat, Munch, Milkybar, and Nescafe Classic posted double-digit growth due to sustained demand, better visibility, and penetration.

Dividends: The Board declared a second interim dividend of ₹110 per share. The dividend amounts to ₹1,060 crore which will be paid on and from 16 November, 2021.

E-commerce focus: The company is focusing on its e-commerce business to grow and it is witnessing a lot of traction in this segment. To improve the shopper's experience, the company is developing new models like Quick Commerce to lower its delivery times.

Nestle Q2 earnings review:

Neste India has reported a moderate set of numbers for the quarter ended September, in line with street estimates. The profits and margins suffered due to rise in commodity prices and supply restrictions. Despite all of that, the company was able to post a double digit domestic growth sequentially as well as on a yearly basis. E‐commerce channels showed strong acceleration on the back of convenience and pandemic driven consumer behaviour. 

Going forward improvement in e-commerce sales, focus on innovation and distribution augurs well for future growth prospects and company’s relatively high pricing power that will aid margins. Nestle India stock closed at Rs 19,406.55, down 0.16 per cent, on Tuesday on NSE.