Nestle India posts higher Q4 profit on strong urban demand

Bengaluru, 7 February: Nestle India reported a nearly 16% rise in fourth-quarter profit before a one-time charge on steady urban demand for its products including its Nescafé range of coffees and KitKat chocolates.

Profit before exceptional items and tax grew to ₹994 crore ($119.81 million) for the three months ended 31 December 2023 from ₹859 crore a year earlier.

The company recorded a one-time charge of ₹107 crore during the period, it said.

Shares of Nestle India, which is known for products such as Maggi instant noodles and Milkmaid condensed milk, rose 2% after its results. They jumped more than 18% in the third quarter, outperforming a 10% rise in the Nifty FMCG Index.

Urban consumers with higher disposable incomes bought more packaged goods during the quarter despite the rising prices of essentials such as vegetables, pulses and spices.

This helped the company report an 8.1% rise in revenue to ₹4,600 crore, while cost of materials consumed, which includes raw materials such as palm oil, coffee beans, spices and sugar, eased 1.4% to ₹1,976 crore.

"Our beverages business witnessed a double-digit growth and Nescafé gained significant market share," Managing Director Suresh Narayanan said in a statement.

Parent and Swiss chocolatier Nestle SA is due to report quarterly results on 22 February 2024.

Nestle India's rival Hindustan Unilever missed quarterly profit expectations, while Britannia Industries reported a fall in profit, both on account of subdued rural demand and elevated competition.

However, Marico reported better-than-expected profit on declining raw material costs.

Nestle also declared an interim dividend of ₹7 per share.