Maggi & KitKat maker Nestle India reports highest domestic growth in a decade in FY22

• For the fourth quarter ended December, it said net profit surged 66% year-on-year to ₹628 crore, beating analyst expectations.
  
• The growth was led by both volume as well as mix, the company said, adding that its demand outlook is robust, while the price outlook is “evolving”.
  
• Key products in its portfolio like Maggi, KitKat, Munch and Nescafe registered healthy growth during the year, driven by strong consumer engagement.
  
• Nestle India also declared a final dividend of ₹75.
  

Maggi and KitKat maker Nestle India reported its highest domestic growth in a decade, at 14.8% for the full year 2022. For the fourth quarter ended December, it said net profit surged 66% year-on-year to ₹628 crore, beating analyst expectations.

For the full year 2022, Nestle India said its domestic sales growth was the highest in a decade. The growth was led by both volume as well as mix, at a time when its rivals like HUL said they are “cautiously optimistic” about demand recovery.

Nestle India follows a January-December financial year.

“I am delighted to share that we delivered our highest double‐digit growth in a decade led by sustained volume and mix-led growth, leading to a strong value growth. In 2022, total sales grew by 14.5% and domestic sales increased by 14.8%, with broad-based performance across all categories,” said Suresh Narayanan, chairman and managing director, Nestle India.

“Premiumisation is one of the growth engines that will lead to future acceleration of the business,” Narayanan added.

The company’s revenue for the December quarter rose 13.6% YoY to ₹4,257 crore, coming in slightly below analyst expectations of 16% growth. For the full year, its revenue grew 14.6% – as exports rose 8.2% – while net profit growth stood at 12.9%.

The company also declared a final dividend of ₹75.

Nestle India’s Q4 and FY22 in numbers:


Source: Company reports

“Out‐of‐home (OOH) business made a strong comeback in 2022, recovering its pre‐Covid base and delivering robust growth. With our ‘direct to consumer’ (D2C) platform, products manufactured by the company are now available in Delhi – NCR,” Narayanan added.

Broad-based growth across all categories

Despite inflation being a key pain point for all companies in the fast-moving consumer goods (FMCG) sector, Nestle India said it witnessed broad-based growth across all categories, driven by a mix of volume as well as premiumisation.

“Year 2022 witnessed broad-based, double-digit, volume & mix-led growth, despite a challenging and highly volatile economic environment,” the company said in its exchange filing.

Key products in its portfolio like Maggi, KitKat, Munch and Nescafe registered healthy growth during the year, driven by strong consumer engagement. The company said KitKat and Munch gained market share during the year and drove growth in the confectionary segment.

Nescafe aficionados also helped Nestle India post the highest ever single-year growth in household penetration.

On the other hand, the company said its milk products faced challenges due to an unprecedented boil in milk prices, partly due to rising feed costs as well as lumpy skin disease in the second half of 2022.

Demand robust, but price outlook ‘evolving’

A cooldown in inflation towards the end of 2022 has offered respite to FMCG companies, but Nestle India stopped short of specifying its pricing outlook for 2023, more so due to the heightened volatility.

The company, however, remained optimistic about the demand outlook.

“Demand continues to be robust with the domestic outlook of prices evolving because of supply and weather conditions,” the company said in its exchange filing.

Capitalising on the year of millets

Nestle India also announced that it will integrate millets into relevant categories, capitalising on the fact that 2023 has been declared as the International Year of Millets.

“We launched a new sub‐brand, CEREGROW Grain Selection. Inspired by traditional ingredients, a nutritious cereal for 2–4-year-old toddlers made from ragi (finger millet), mixed fruits and ghee. Millets have been an integral component of the food basket in India, and CEREGROW Grain Selection rediscovers the value of these traditional millets,” the company said.

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