Nestle India shares rise 3% on strong March quarter results, check key highlights
Upstox
3 min read • Updated: April 25, 2024, 4:29 PM
Summary
Nestle India reported strong double digit growth in net profit during the March quarter. EBITDA margin as of Q4FY24 was at 25.61% that rose by 1.81% YoY against the same quarter, the previous year. The company has recommended a final dividend of ₹8.5 per share. Record date is 15th July 2024.
Nestle India shares jumped more than 3% intraday on Thursday, with a day high of ₹2,577 per share after the company reported double-digit growth in net profit to ₹ 934.17 crore. Here are the key takeaways from Nestle India March quarter results.
Revenue rise 9% YoY
Consolidated net revenue of Nestle India in the March quarter stood at ₹5,268 crore, which rose by 9.05% YoY as compared to the same period previous year. As per company, a strong growth momentum was witnessed across the product portfolio led by a combination of pricing and mix.
Net Profit sees double digit growth
The consolidated net profit for the period came in at ₹ 934.17 crore which rose by 26.73%, as compared to the period a year ago, when it reported ₹737 crore. The net profit margin in Q1 came in at 17.64% which rose by 2.4% YoY.
As per management, Nestle India delivered double-digit growth, despite challenges posed by rising food inflation and volatile commodity prices.
EBITDA Performance
EBITDA stood at ₹1,349 crore in Q1 rising by 23% YoY. The EBITDA margin for Q1 is 25.6% which was 22.68% a year ago, which showcases a 293 basis points jump in EBITDA margin on a yearly basis. The margin expansion was aided by strong consumer engagement, media campaigns, innovation and enhanced RURBAN penetration.
Financial Highlights for the fifteen months ended 31 March 2024
Total sales stood at ₹24,276 crore. Net profit of ₹3,933 crore. Profit from operations at 22% of sales. Cash generated from operations at ₹4,175 crore.
Announces dividend of ₹8.5 per share
A final dividend of ₹8.5 per share on the face value of ₹1 per share is recommended for the financial year 2023-24 by the company’s management. The record date for determining eligible shareholders is set as 15 July 2024.
Outlook on commodity prices
Commodity prices are seeing headwinds mainly in Coffee, Cocoa (ATH), Cereals and grains attributed to structural cost increase backed by MSP. Milk prices are also expected to rise due to the harsh summer season.
New business initiatives
Company board approved launch of Nespresso in India wherein the Company will engage in the sale and distribution of Nespresso products (machines and capsules) through its distribution network, online channels, and boutiques under commercial arrangements with Nespresso and third parties. The Company expects to launch Nespresso in India by the end of 2024.
Additionally the board has also approved execution of a definitive agreement to form a joint venture between the company and Dr. Reddy’s Laboratories Limited to bring together the well-known global range of nutritional health solutions as well as vitamins, minerals and health supplements of Nestle Health Science. The joint venture is expected to become operational in the second quarter of the financial year 2024-25, subject to customary closing conditions.