Riding on the wave of robust growth of its confectionery and beverage products, Nestle managed to beat the market projections and report a 24.7 per cent YoY rise in its net profit to ₹737 crore in the quarter ending March. The company reported a net sales of ₹4,808 crore. Its total sales growth stood at 21.3%, whereas, domestic sales growth was at 21.2%.

The company reported a 21 per cent YoY hike in its revenue from operations to ₹4,830.5 crore in January-March quarter of CY23 against ₹3992.6 crore in the same quarter of the previous financial year. Nestle follows a January to December financial year.

After the announcement of its better-than-expected results, Nestle shares were trading 0.07% higher at ₹20680.65 apiece in intraday trading on BSE on Tuesday.

On April 12, the company’s board of directors had declared an interim dividend for 2023 of ₹27 per equity share, with a face value of ₹10, per equity share. The dividend amounting to ₹2,603.2 million, will be paid on and from 8th May 2023 along with the final dividend for 2022 of ₹75.0 per equity share.

The FMCG major reported of delivering strong growth across all products in its food portfolio, including dishes and cooking aids. The growth momentum of the company was boosted by market presence, media campaigns and focused consumer activation.

Milk and nutrition products were one of the key growth drivers of the company which registered a strong double-digit growth despite commodity pressures. Company products like milkmaid, kitkat, and Munch displayed robust performance. Apart from chocolates and milk products, Nescafe also registered a strong growth by attaining its all-time high market share in the quarter under review.

“I am pleased to share that we have continued to deliver robust sales growth this quarter, which is broad based with a healthy balance of pricing, volume, and mix. This is the highest growth for the Company in a quarter in the last 10 years (excluding the exceptional quarter in 2016 which was off a low base in 2015),” said Suresh Narayanan, Chairman and Managing Director, Nestle India.Market experts were expecting a nominal double digit sales and profit growth of Nestle. However, a whopping 25 per cent YoY rise in Nestle’s profit has outpaced the market projections of the January-March quarter.

“Nestlé India is expected to maintain strong growth momentum with 12.8% sales growth led by mix of volume & pricing growth. We estimate gross margin contraction of 173 bps in Q4. Operating profit is estimate to grow 3.9% with contraction of 186 bps in operating margins to 21.5%. We estimate 7.7% growth in net profit to ₹640.3 crore,” said ICICI Direct Research in its report.

“We model 13% YoY revenue growth. Four-year revenue CAGR at 11%. We expect gross margins to be down 140bps YoY and 90bps QoQ to 54% We model EBITDA growth of 14% YoY, EBITDA margin at 23.9%”, said ICICI direct securities.