Nestle is the best food and beverages company in the world and it also holds a very strong foothold in India. As seen by the data for March quarter nestle India’s profit rose to 6.8% from Rs287.3 crore to Rs306.8 crore.
Net sales for this period of time was the highest since September 2014. Consolidated net sales also grew from Rs2,361 crore to Rs2,576 crore which is a rise of 9.1%. All this growth has been achieved on the back of strong volume growth which has helped domestic sales to rise by 9.7%. It now stands at Rs2,409 crore. It has regained its markets share by Maggi after it had setbacks when it was branded not fit to be eaten. It has however bounced back from the setback and is on course to become the best in the business.
The profitability has however taken a hit due to the growth in input costs, employee expenses, and excise duty. The cost of materials went up from Rs965 crore to Rs1,134 crore which is a rise of 17.5% in the last year. The rising cost of milk and milk derivatives have brought about this huge change in the cost of materials.
The company has implemented a new compensation structure which has brought about a growth in the employee expenses. The growth has amounted to 15.8%.
The managing director and chairman of Nestle India Suresh Narayanan said,” Innovation and renovation, as also volume-based growth, are core business strategies outlined by Nestlé India almost 18 months back and I am pleased that this is now playing an important role. We will leverage our expertise and strengths in science-based nutrition and explore the areas of micronutrient fortification for our mass consumption products. We embrace the challenges of the future, with its competitive intensity and rapidly changing consumer landscape, with dedication, excitement, and energy.”
Last Thursday Rama Bikapurkar was appointed as an independent non-executive director and Martin Roemkens as a whole time director by the Nestlé’s shareholders. Its stock closed at Rs6,819.55 which is 0.48% lower than previous day in the Bombay Stock Exchange.