Nestle India’s profit grows 65.5% in December quarter

Nestle India posted a net profit of ₹628.06 crore in the fourth quarter ended December 31, up 65.50 per cent against ₹379.48 crore in the same period a year ago. The company’s sales were up 13.95 per cent to ₹4,233.27 crore in the quarter under review.

The packaged food major, which follows the January-December period as fiscal period, posted a net profit of ₹2,390.52 crore for the full year of 2022, up 12.85 per cent compared with 2021. Sales rose 14.49 per cent to ₹16,789.53 crore in 2022.

The company has delivered its “highest double-digit growth in a decade”, led by sustained volume and mix led growth, leading to a strong value growth, said Suresh Narayanan, Chairman and Managing Director, Nestle India. He added that domestic sales increased by 14.8 per cent in 2022, with broad based performance across all categories.

The company’s board of directors also recommended a final dividend of ₹75 per share for 2022 amounting to ₹723.12 crore.

Capex plans

The management, on an investor call, said it will be stepping up capex in the next two years as many of its plants are at very high capacity utilisation. It plans to invest ₹1,300 crore in 2023 and ₹2,000 crore in 2024.

Last year, the company had announced an investment of ₹5,000 crore by 2025.

Rurban segment

Narayanan said the key engine of growth for Nestle India continues to be penetration-led volume growth and that “urban story” remains strong. “I’m quite enthused and encouraged by the growth that we’ve been able to record in rural markets. In the last couple of quarters, it has been strong double-digit growth… but yes, the base is lower,” he added.

“We strengthened our ‘RURBAN’ approach by sharpening geographic focus, increasing distribution points and going deeper into smaller towns and cities. This is bearing fruits in terms of strong and sustained growth in smaller towns and especially, rural villages,” Narayanan added.

On the commodities front, the company said categories such as cereals, grains and coffee continued to be at a 10-year high. “Fresh milk prices continue to remain firm. With some respite in crude oil, input materials such as packaging have witnessed relief. Demand continues to be robust with the domestic outlook of prices evolving because of supply and weather conditions,” it added.