Rs 140/Share Dividend, 1:10 Stock Split; Nestle Stock Hits New 52-Week High After Q3 Report Card

FMCG giant, Nestle surpassed Street's estimates in the third quarter earnings of 2023, with a consolidated net profit of Rs 908.1 crore, registering a robust growth of 37.3% year-on-year and 30.03% quarter-on-quarter. Sales of products also witnessed strong growth in the quarter. Nestle has also declared incentives for its shareholders. It has recommended a hefty dividend of Rs 140 per share, and a stock split in the ratio of 1:10.

Right after the earnings report, Nestle shares hit a new 52-week high of Rs 23,619.40 apiece on BSE. Earlier, in the trading session, Nestle shares traded volatile. Its market cap is nearly Rs 2.26 lakh crore.

It needs to be noted that Nestle follows a calendar year for reporting its financial results, instead of the March ending period.

Q3 Results:

Sales of products stood at Rs 5,009.52 crore in Q3 of the current year, compared to Rs 4,577.44 crore in Q3 of 2022. In the preceding quarter, the sales of products were at Rs 4,619.50 crore.

Revenue from operations was at Rs 5,036.82 crore in Q3 of 2023, as against Rs 4,658.53 crore in Q2 of 2023 and Rs 4,610.84 crore in Q3 of 2022.

Net profit also surged to Rs 908.1 crore in the quarter under review, as against Rs 661.46 crore in Q3 of 2022. In the previous quarter, Nestle's profitability was at Rs 698.34 crore.

Suresh Narayanan, Chairman and Managing Director, Nestlé India said, "I am pleased to share that we have, yet again, delivered consistent performance almost across all major brands. Domestic sales grew double digits, on account of mix, volume and price. Key brands continued to perform well, led by KITKAT, NESCAFÉ CLASSIC, NESCAFÉ SUNRISE, supported by MUNCH and MILKMAID."

Narayanan added, "We are investing towards building our brand equity and have made strong and significant investments across all product groups. We crossed Rs 5,000 crore turnover, which has been our first in any quarter in the history of the Company and a landmark for us."

Further, Narayanan said, "We have accelerated our focus on Innovation and Renovation, launching many new products through the year. We are creating a differentiated and diverse food portfolio across brands that promotes millet or 'shree anna' as a more sustainable food. Our manufacturing and processing capabilities and understanding of the Indian palate enables us with expertise to introduce millets in relevant product groups. We recently launched Nestlé a+ Masala Millet with bajra, in two variants, Tangy Tomato and Veggie Masala. Our portfolio has products like Nestlé CEREGROW grain selection with ragi, Nestlé MILO Cocoa Malt with bajra, Nestlé KOKO KRUNCH millet jowar breakfast cereals that contain millet. Many more products with millets are on the anvil."

Dividends:

The Maggi maker, Nestle is a dividend king stock and has paid huge incentives in the form of dividends to its shareholders from its profitability.

On October 19th, Nestle declared a second interim dividend of Rs 140 per share having a face value of Rs 10 each for r the year 2023 on the entire issued, subscribed and paid-up share capital of the Company of 9,64,15,716 equity shares of the nominal value of Rs. 10/- (Rupees ten only) each.

Nestle said, the second interim dividend for the year 2023 will be paid on and from 16th November 2023 to those members whose names appear in the Register of Members of the Company and as beneficial owners in the Depositories, as on the Record Date fixed for the purpose i.e., 1st November 2023.

As per Trendlyne data, Nestle has declared 68 dividends since May 2001.

In the financial year 2022, the company paid a total dividend of 2,200% amounting to Rs 220 per share. Currently, its dividend yield is 0.95%.

Nestle Stock Split:

The board of directors of Nestle has announced the stock split in the ratio of 1:10. This means that the existing 1 equity share having a face value of Rs 10 each will be sub-dividend into 10 equity shares having a face value of Re 1 each.

Nestle said the Record Date for sub-division/ split of existing equity shares will be intimated in due course.

Listed companies declare a stock split of already owned shares into much smaller shares. This is done to improve liquidity by breaking the shares into smaller sizes. The face value of the shares reduces in proportion to the split ratio, however, there is no impact on the company's share capital and reserves. Although the price value of a stock reduces in a stock split, the number of shares held rises in the investors' portfolio of that specific stock.