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Published: April 25, 2024
Updated: April 25, 2024

Nestle India Gives Out Robust Results Amidst Challenges: Profit surges by 27%

Q4 Financial Performance:

Nestle India, a prominent player in the FMCG sector, has unveiled robust Q4 results, showcasing a remarkable 27% surge in net profit to Rs 934 crore compared to the previous year's Rs 737 crore. This substantial growth underscores the company's resilience amidst market challenges.

Revenue Boost:

The company's revenue from operations for Q4 FY24 soared to Rs 5,268 crore, marking a significant uptick of 9.05% from Rs 4,831 crore in the corresponding period last year. This upward trajectory signals a healthy demand for Nestle's diverse product portfolio.

Chairman's Perspective:

Suresh Narayanan, Chairman and Managing Director of Nestle India, expressed satisfaction with the double-digit growth achieved despite hurdles posed by escalating food inflation and volatile commodity prices. He attributed this success to a strategic blend of pricing adjustments and product mix enhancements, culminating in domestic sales crossing the Rs 5,000 crore milestone.

Shareholder Rewards:

In a move to further enhance shareholder value, Nestle India's Board of Directors recommended a final dividend of Rs 8.50 per equity share for the fifteen-month period ending FY24, amounting to Rs 819.53 crore. This dividend distribution complements previous interim dividends, demonstrating the company's commitment to delivering returns to its shareholders.

Strategic Partnership:

Nestle India has ventured into a strategic collaboration with Dr. Reddy’s Laboratories to introduce innovative nutritional solutions to the market. Under this agreement, a joint venture company will be established, with Dr. Reddy's holding a majority stake of 51% and Nestlé India holding 49%. Nestle India retains the option to increase its shareholding up to 60% after six years, ensuring a symbiotic partnership for mutual growth.

Market Performance:

Despite prevailing challenges, Nestle India's shares demonstrated resilience, trading 1.68% higher at Rs 2,544.85. Analysts commend Nestle's strong growth trajectory, particularly in urban areas, and highlight the untapped potential in rural markets, positioning the company favourably for future expansion.

Analyst Insights:

According to brokerage houses , Nestle India's sustained growth amidst adverse conditions showcases its resilience and market positioning. While acknowledging near-term challenges, analysts retain an optimistic outlook, recommending an "Accumulate" rating for investors, underscoring Nestle's long-term growth prospects.

Nestle India's stellar Q4 performance, coupled with strategic initiatives and shareholder-centric policies, reaffirms its position as a leading player in the FMCG sector. Despite challenges, the company's innovative strategies and market resilience bode well for sustained growth and value creation in the foreseeable future.