FMCG major Nestle India is expected to deliver revenue and profit growth double-digit year-on-year growth for the January-March quarter.
The revenue growth will mostly be driven by price hikes, with the maggi, noodles and chocolate categories are expected to grow at faster pace. However, with milk and related product categories to see moderate sales given high milk prices are adversely impacting growth.
Nestle India will come out with its first-quarter results on 25 April,2023. The company follows a January-December financial year.
“Nestlé India is expected to maintain strong growth momentum with 12.8% sales growth led by mix of volume & pricing growth. Maggi noodles & chocolate categories are expected to grow at faster pace but milk & related product categories to see moderate sales given high milk prices are adversely impacting growth. We estimate gross margin contraction of 173 bps in Q4. Operating profit is estimate to grow 3.9% with contraction of 186 bps in operating margins to 21.5%. We estimate 7.7% growth in net profit to ₹640.3 crore,” said ICICI Direct Research in its report.
While, HDFC Securities in its report said that it expects Nestle to report revenue growth in double digit. It said that urban markets returned to positive volume growth while rural markets still remain muted. Despite near-term consumption pressure, some green shoots are visible such as moderating inflation, improving consumer confidence and increase in government spending.
Fast-Moving Consumer Goods (FMCG) sector which has been under pressure for almost the entire last year, but with softening of commodity prices, companies are expected to post uptick in volumes in quarter ended March 2023. However, rural demand conditions still remain soft compared to urban demand.
“We model 13% YoY revenue growth. Four-year revenue CAGR at 11%. We expect gross margins to be down 140bps YoY and 90bps QoQ to 54% We model EBITDA growth of 14% YoY, EBITDA margin at 23.9%,” said the brokerage.
FMCG major Nestle India reported a net profit of ₹628 crore in the fourth quarter of CY22 (Q4CY22), up 66% year-on-year (YoY). It was ₹379 crore in the year-ago period. The revenue from operations came in at ₹4,257 crore, up 13.5 per cent as compared to ₹3,748 crore in the year-ago period.
On Monday, the company’s scrip ended 0.77 per cent up at ₹20,639.65 on BSE.
