Nestle’s net profit for September quarter jumps 37%, board approves stock split

• Nestle India’s quarterly revenues crossed ₹5,000 crore for the first time during the September quarter of 2023.
• The company approved a stock split of shares from a face value of ₹10 each into ten equity shares with a face value of ₹1.
• It approved a second interim dividend of ₹140 per share amounting to ₹1,349.82 crore.

Nestle India, the maker of Maggi and Nescafe, reported a 37% year-on-year jump in its net profit during the September quarter to ₹908 crore. Revenue from operations grew by 9% to ₹5,036 crore. The company said that it’s the first time it has crossed ₹5,000 crore turnover in a quarter.

The company’s board also approved a stock split of shares from a face value of ₹10 each into ten equity shares with a face value of ₹1. This is subject to approvals, the company said. It also approved a second interim dividend of ₹140 per share amounting to ₹1,349.82 crore. It’s to be paid on and from November 16, 2023. It paid an interim dividend of ₹27 per equity share paid in May 2023.

The company which also exports its products said that its domestic sales grew at 10.3%. Domestic sales growth is broad based, with prudent pricing supported by mix and volume, Nestle said.

“Domestic sales grew double digit, on account of mix, volume and price. Consumer trends and increasing proclivity towards adoption of brands in small towns and large villages has propelled the growth of the company,” said Suresh Narayanan, CMD of Nestlé India.

Its e-commerce channel contributed to 6.1% of the quarterly sales with continued growth across product groups driven by quick commerce. The retail channel too delivered strong double-digit growth.

Uneven rains & commodity outlook

The cost of its materials consumed by the company came down by 1.8% YoY. The company indicated that there could be stress from raw materials going forward in its commodity outlook. While a healthy milk flush in winter is expected to keep prices stable, others might see stress.

“Uneven rain and rain deficit is expected to impact production of maize, sugar, oilseeds and spices that may have an adverse impact on pricing. Coffee continues to be volatile because of the global supply deficit. The weather during the harvest of the Indian Robusta crop may impact production. Upcoming winter weather may impact wheat production,” Nestle said.

In the June-end quarter, its domestic sales registered higher growth of over 14%, thanks to a double digit growth across all its product groups. This quarter, it saw double digit growth in milk products and nutrition and Out Of Home categories. Its e-commerce channel contribution also came down to 6.1% from 6.5% last quarter.