Nestle India, a leading player in the FMCG sector, reported a strong double-digit growth in its domestic sales during the third quarter. The company attributed this growth to a combination of factors, including product mix, volume, and pricing, as stated in its filing with the stock exchange on Thursday.
“We crossed INR 5,000 crore turnover, which has been our first in any quarter in the history of the company and a landmark for us,” said Suresh Narayanan, Chairman and Managing Director, Nestle India.
Nestle stated that the company’s growth has been driven by evolving consumer trends and a growing inclination to embrace brands in smaller towns and larger villages.
“We are creating a differentiated and diverse food portfolio across brands that promotes millets or ‘shree anna’ as a more sustainable food,” said the FMCG major.
The company noted that irregular rainfall patterns would have a significant impact on the production of essential ingredients such as maize, sugar, and spices, leading to a surge in prices.
Nestle’s profit for the third quarter amounted to INR 908 crore, surpassing the anticipated INR 799 crore as per polls. Additionally, the company announced a second interim dividend of INR 140.
Nestle has reaffirmed its full-year projections, with expectations of organic sales growth ranging from 7% to 8% and an underlying trading operating profit margin falling within the range of 17.0% to 17.5%.
The company reported that E-Commerce accounted for 6.1% of quarterly sales, and this growth was sustained across various channels, primarily fueled by Quick Commerce.
Despite the increasing costs of essential commodities like vegetables and dairy products, Indian consumers, especially those residing in urban areas, have shown a willingness to indulge in affordable indulgences like chocolates and biscuits.
Nestle acknowledges the coffee market’s ongoing instability, primarily attributable to a global supply shortage. The FMCG company foresees that the upcoming Indian Robusta crop harvest could be impacted by weather conditions, which may, in turn, affect production.
The leading FMCG company disclosed that its well-known brands, including Kitkat, Nescafe Classic, Nescafe Sunrise, along with the support from Munch and milkmaid, maintained their robust performance.
The upcoming winter weather may affect wheat production, but there is a significant expected surplus in milk production during the winter, which is likely to uphold price stability.
Expanding its offerings in key global markets to cater to the Indian diaspora has led to increased satisfaction and subsequent growth for the company. The Maggi and Nescafe Sunrise product lines saw strong demand across both ethnic and mainstream distribution channels.