Nestle Q2 Results: Earns PAT Of Rs 698.34 Crore Up By 37% YoY Driven By Double-Digit Growth In Sales

FMCG giant, Nestle India earned a net profit of Rs 698.34 crore in the second quarter of 2023, compared to Rs 510.24 crore in Q2 of the previous year, registering a growth of a whopping 36.87% YoY. The bottom-line front was better than expected. Also, the company posted double-digit topline growth, domestic sales jumped 14.6% YoY. The Maggi-maker witnessed healthy performance across all products.

However, Q2 PAT declined by 5.2% from a net profit of Rs 736.64 crore in March 2023 quarter.

Revenue from operations came in at Rs 4,658.53 crore in Q2 of 2023, rising by 15.15% from Rs 4,045.69 crore in Q2 of last year. However, revenue dipped by 3.56% sequentially.

In the quarter, domestic sales rose by 14.6% YoY to Rs 4,420.77 crore, while export sales jumped by 25.45% YoY to Rs 198.73 crore.

At the time of writing, Nestle's share price traded at Rs 22,273.50 apiece, down by Rs 530.95 or 2.33% on BSE. The stock ranged from an intraday high and low of Rs 22,899 apiece to Rs 22,081.75 apiece respectively in the trading session. The stock tumbled due to lower sequential performance in the quarter.

Suresh Narayanan, Chairman and Managing Director, of Nestle India, said, "I am pleased to share that we have, yet again, delivered robust performance, with all product groups registering double-digit growth. This is the fifth quarter in a row of double-digit growth across ALL product groups. Domestic sales growth is broad-based and grew by 14.6%, on the back of prudent pricing and supported by mix and volume with targeted brand support. Key brands continued to
perform well, led by KITKAT, NESCAFE and MAGGI among others.

Here are the key highlights of the quarter:

E-commerce: The channel contributed to 6.5% of the quarterly sales and continued the growth momentum driven by Quick Commerce.

Organized Trade: The channel continued delivering strong broad-based growth across categories driven by store expansion and improved footfalls.

Out of Home (OOH): Continued to deliver robust growth through premiumisation and portfolio transformation initiatives. Strong performance is an outcome of kiosk expansion and prioritization of emerging channels.

Exports: Registered robust double-digit growth across all categories through the proliferation of products such as NESCAFE Sunrise and Polo.

Nestle also announced its commodity outlook. It said, "Commodities such as edible oils, wheat and packaging materials have been in the lower price range. A reversal of the price trend is noted in fuels with prices softening in second quarter after reaching higher level towards the end of quarter one. In fresh milk, there has been price stability. Robusta prices are elevated and are expected to
remain volatile."