Newsletter
Nestlé’s Q2 results were in line with street expectations across all key parameters.
By the numbers:
Net profit: up 36.4% at ₹1,027 cr vs ₹753 cr (YoY)
Revenue: up 20.3% at ₹6,788 cr vs ₹5,644 cr (YoY)
EBITDA: up 30.6% at ₹1,615 cr vs ₹1,237 cr (YoY)
EBITDA Margin: at 23.8% vs 21.9% (YoY)
The details: over the past four to five quarters, Nestlé had consistently beaten street expectations by a wide margin. Simply meeting expectations therefore came as a negative surprise for the stock.
The company’s shares also tumbled as management flagged rising inflation, particularly food inflation, and continued pressure from commodity costs.
Nestlé India Chairman and Managing Director Manish Tiwary said the company recorded broad-based growth across product groups, supported by robust double-digit volume growth. Total sales rose 20.5% to ₹6,782.2 crore, while domestic sales increased 20.4%.
The confectionery business delivered another quarter of double-digit, volume-led growth, supported by market share gains for KitKat and sustained momentum across Munch and Milkybar.
The powdered and liquid beverages business also recorded strong volume-led growth, supported by wider household reach, affordability and premiumisation across its coffee portfolio.
The company said e-commerce continued to grow, led by quick commerce. General trade recorded double-digit growth across town categories, with strong momentum in rural markets.
In focus: Nestlé said it would continue to focus on productivity and operational efficiencies to mitigate commodity cost pressures.
In its commodity outlook, the company said coffee and wheat prices were expected to remain range-bound, while sugar and edible oil prices had stabilised at elevated levels. Cocoa prices remained volatile due to weather-related crop concerns in key producing regions.
