Nestle India Ltd, a leading FMCG company, posted a 5% year-on-year (YoY) fall in net profit, which was Rs 885.4 crore for the Q4 of FY25. The decline was mainly due to an increase in raw material prices.
The firm was also greatly affected by the rising prices of major commodities like coffee, cocoa, and milk, which hit its overall profitability in the quarter, as pointed out in its stock exchange filing.
Apart from rising input prices, export sales also declined sharply by 8.65% YoY. This decline in export revenues resulted in the firm's overall sales growth being contained at 3.7%, even as there was some improvement in domestic demand.
The firm continued to struggle with continual cost inflation, albeit with stable edible oil prices. The rising prices of coffee, cocoa, and milk, especially as the summer season started, put further pressure on its bottom line.
In spite of these difficulties, Nestle India reported that it managed to sustain momentum in its core categories of business, with robust volume growth serving as a principal indicator of consumer resilience and enhanced sentiment in a challenging macroeconomic landscape.
Suresh Narayanan, Nestle India Chairman and Managing Director, said, "Volume growth is a good sign of consumer resilience and better sentiment in a difficult macro environment. But sustained cost inflation still weighed on profitability." He further added that sustained investments in innovation and distribution were driving market share in different categories.
On a positive side, Nestle India recorded a 4.2% YoY growth in domestic sales, which was at a record high of Rs 5,235 crore. The growth came on account of enhanced consumer sentiment and increased volume sales, especially in the urban market space, in the core food and beverages business.
The firm also announced a final dividend of Rs 10 per equity share for FY25, with the record date being July 4 and payments from July 24. This is on top of the interim dividends that have already been paid in the financial year.
Nestle India also underscored the improvement in its e-commerce business, which was aided by improved availability of products, personalized online packs, and targeted media campaigns.
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