Nestle India's Q2 net profit surges 36% to Rs. 908cr
Nestle India has announced a 36% increase in consolidated net profit for the Q2 of FY24, reaching Rs. 908 crore. This is higher compared to the Rs. 668.3 crore during the same period last year. The company's total revenue also rose by 9.6% to Rs. 5,036 crore, up from Rs. 4,591 crore a year ago. These results exceeded expectations, as a brokerage poll had predicted Nestle's Q2 revenue at Rs. 5,177.1 crore, and net profit at Rs. 841.4 crore.
Domestic sales growth and EBITDA performance
Domestic sales for Nestle India grew by 10.3%, fueled by a mix of volume and price factors. The company's earnings before interest, tax, depreciation, and amortization (EBITDA) for the quarter reached Rs. 1,225 crore, marking a 1.6% increase from CNBC-TV18's poll of Rs. 1,205 crore. However, the EBITDA margin decreased by 220 basis points (bps) to 24.3% YoY from 22.1% in the corresponding quarter of the previous fiscal.
Impact of weather conditions on production
Nestle India has voiced concerns over uneven and deficit rain impacting the production of sugar, maize, oilseeds, and spices, which may result in adverse pricing effects. Additionally, coffee remains volatile due to the international supply deficit. The weather during the harvest of the Indian Robusta crop may also affect production. The company anticipates that the upcoming winter weather may impact wheat production, while a healthy milk flush is likely to keep prices stable.
Stock split and dividend announcement
In addition to its quarterly earnings, Nestle India's board declared a second interim dividend of Rs. 140 per equity share of Rs. 10 each for 2023. This dividend will be paid on or from November 16, 2023, with a record date fixed at November 1, 2023. The Nestle board also approved a share split in the ratio of 1:10. Nestle's stock was trading higher at Rs. 23,490 on the NSE at 11:38am today.
