Shares of Nestlé India rose over 8 per cent on 21 April, emerging as the top gainer on the Nifty 50, after the company reported a strong set of March quarter results supported by robust demand and favourable cost trends.
The stock ended 8.4 per cent higher at Rs 1,394.9 on the National Stock Exchange (NSE), while the Nifty FMCG index gained 2.5 per cent.
Nestlé India reported a 26 per cent year-on-year increase in net profit to Rs 1,114 crore for the quarter ended 31 March, compared with Rs 885 crore a year earlier. Revenue rose 23 per cent to Rs 6,748 crore, marking the company’s highest-ever domestic sales, driven by strong demand for key products such as KitKat chocolates and Maggi noodles.
The performance was supported by double-digit volume growth across segments, aided by a more than 50 per cent increase in advertising spends. The company also maintained a healthy EBITDA margin of 26.3 per cent.
Growth was broad-based, with confectionery, beverages and pet food businesses all reporting strong traction, supported by increased distribution, product innovation and premiumisation.
The company also highlighted a favourable outlook on key commodities, with coffee and cocoa prices trending lower due to improved global supply, while sugar prices remained stable.
However, edible oil prices have firmed up in line with crude oil trends, and wheat output has been impacted by unseasonal rains, leading to delays in harvest and concerns over quality.
The combination of strong earnings, volume-led growth and easing input cost pressures lifted investor sentiment, driving the sharp rally in the stock. |
