Nestle India Share Price Drop as Results Miss Estimates

On Thursday, 25th July, Nestle India shares fell after the quarterly results, and were trading at ₹2,518, down 1% from the previous close.

Nestle India net profit for Q1 FY25 rose 6.9% on-year to ₹746.6 crore from ₹698.3 crore in the corresponding quarter of the previous year. The FMCG major's revenue from operations for the April-June quarter rose to ₹4,814 crore, up 3.3% compared to ₹4,659 crore a year ago.

The FMCG major's April-June earnings growth was helped by a better product mix and sales volume growth. However, the results missed estimates. A Moneycontrol poll of eight brokerages had pegged Nestle India's Q1 net profit at ₹798 crore, and revenue at ₹5,060 crore.

“I am pleased to share that despite external challenges such as lower consumption growth, concerns on continued food inflation and volatile commodity prices, we have delivered growth across our product groups. Almost a fourth of our growth has been mix and volume led, and we hope to strengthen this trend in the coming months," said Suresh Narayanan, Chairman and Managing Director at Nestlé India.

"Despite external challenges such as lower consumption growth, concerns on continued food inflation and volatile commodity prices, we have delivered growth across our product groups," said Suresh Narayanan, Chairman and Managing Director of Nestle India. "Almost a fourth of our growth has been mix and volume led, and we hope to strengthen this trend in the coming months," he added.

Nestle India said the Prepared Dishes and Cooking Aids segment maintained its growth momentum, with innovations contributing to 30 per cent of the growth in the quarter. MAGGI Korean Noodles has been well received by consumers and Masala-Ae-Magic saw double digit growth, it said.

"KITKAT delivered double digit growth. We take pride in confectionery being one of the most distributed businesses with highly connected digital brands and a slew of innovations in the pipeline. Milk Products and Nutrition portfolio-maintained growth," it said.

E-commerce sustained its upward trajectory, contributing to 7.5 per cent of domestic sales and growing at double digit. The Out-of-Home business continued its growth momentum despite unprecedented headwinds of extreme weather conditions across India, Nestle India said.

"Commodity prices are seeing unprecedented headwinds in coffee and cocoa with all time high prices and an ongoing price rally. Cereals and grains are going through a structural cost increase backed by MSP. There is relative stability in milk prices, packaging and edible oils," it said.

During the quarter, Nestle continued to strengthen its distribution infrastructure as part of its RUrban expansion strategy. The company added over 800 new distribution touchpoints including cash distributors, re-distributors and wholesale hubs. Further, Nestle India expanded its reach to 2.05 lakh villages, adding 5,000 villages, it said.

Earlier, on 8 July, Nestle India Board of Directors declared an interim dividend of ₹2.75 per share for the current financial year 2024-25, amounting to ₹2,65.14 crore. This dividend will be paid on 6 August along with the final dividend of ₹8.5 for financial year ended 31 March 2024.