Due to price rises and a pickup in demand for its chocolates and packaged foods in rural regions, Nestle India on Wednesday announced a higher-than-anticipated gain in third-quarter profit.
The maker of Maggi noodles had an 8.3% increase in profit during the three months that ended on September 30. IBES data from Refinitiv shows that analysts expected a profit of Rs657 crore on average. As a result of increased sales of its chocolates, Maggi noodles, Sunrise coffee, and Nescafe coffee brands, revenue from operations increased by 18.3% to Rs4,591 crore.
According to a statement from Suresh Narayanan, managing director of Nestle India, “growth has been very strong in the large metros and mega cities and continuing to be solid across smaller town classes, including rural markets.” Indians in rural areas were obliged to cut back on their spending due to the COVID-19 lockdowns’ lasting effects and the high cost of living, which had a negative influence on the financial performance of manufacturers of consumer packaged goods for over a year.
Analysts claim that some product categories, like as noodles and cookies, withstood the trend because people view them as modest indulgences during recessions, bolstering Nestle’s tenacious urban sales momentum. Indian consumer products manufacturers, whose margins have been squeezed by the rise in commodity costs brought on by the Russia-Ukraine war, would probably see their earnings rise further as a result of the lowering of raw material prices, notable oil.
According to Nestle’s statement, “we are noticing early signs of stability in the prices of a few commodities, such as edible oils and packaging materials.” In early trading, the company’s shares increased 1.1% to Rs19,601 as the creator of KitKat chocolate also declared an interim dividend of Rs120 per share.
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