Nestle India, one of the largest food and beverage companies in India, recently announced its financial results for the fourth quarter (Q4) of 2023. The results showed that both Nestle’s profits and revenue saw a rise during this period compared to the same quarter last year.
According to the results, Nestle’s net profit for Q4 2023 increased by 4.4% to Rs. 655.6 crore compared to Rs. 628 crore in Q4 2022. The company’s revenue from operations also grew by 8% to Rs. 4,600 crore from Rs. 4,257 crore in the corresponding period of the previous year.
The growth in Nestle‘s profits and revenue was driven by strong performance across various business segments. Domestic sales within India grew by 8.9% during the quarter, led by price increases and changes in product mix. E-commerce and out-of-home channels like restaurants and cafes saw particularly strong sales growth.
Nestle invested heavily in branding and marketing activities for its different product categories like food, beverages and nutrition. This helped boost sales volumes and consumer awareness. The company’s operating profit or Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) increased 10.2% to Rs. 1,077 crore in Q4 2023. Gross margins also improved slightly to 23.4% compared to 22.9% in the year-ago period.
For the full year 2023, Nestle’s total income rose 13% to cross Rs. 19,000 crore. Domestic sales growth was supported by the company’s distribution expansion plans and new product launches catering to evolving consumer preferences. The company continued to gain market share in the highly competitive packaged foods sector in India.
In addition to strong quarterly earnings, Nestle announced a third interim dividend of Rs. 7 per share for the 2023-24 financial year. The board also approved the transfer of Nestle’s Business Services division in India to a wholly-owned subsidiary for a total amount of Rs. 79.8 crore.
Analysts viewed Nestle’s Q4 results positively, achieving estimates for both top and bottom line growth. The company is well-positioned to benefit from India’s growing demand for branded packaged food products. However, rising inflation remains a challenge as it increases Nestle’s input costs. The company will need to carefully manage prices while sustaining the sales momentum.
In summary, Nestle India was able to grow its profits and revenue in Q4 2023 backed by robust sales, marketing investments and an expanding product portfolio meeting consumer needs. For the full year as well, the company delivered strong financial performance. If it can effectively counter inflationary pressures, Nestle is well-placed for further growth in the Indian market.
