Nestlé India recently unveiled its financial performance for the fourth quarter of FY25, revealing a profit of ₹873.46 crore. Although this figure reflects a 6.5% decline from ₹934.17 crore in the same period of FY24, the company reported a commendable revenue increase of 4.49%, amounting to ₹5,503.88 crore compared to ₹5,267.59 crore a year earlier. The total income for the quarter reached ₹5,512.32 crore, while expenditures stood at ₹4,307.76 crore.
Q4 Profit Misses Expectations
A recent CNBC TV18 survey had projected Nestlé to achieve a profit of ₹892 crore and revenues around ₹5,540 crore for the quarter. Despite not hitting these targets, the company demonstrated resilience with a 3.7% growth in total sales and a 4.2% rise in domestic sales. Nestlé highlighted that domestic sales exceeded ₹5,235 crore, marking an all-time high and surpassing figures from January to March 2024.
Strong Performance in Beverages and Confectionery
Suresh Narayanan, Chairman and Managing Director of Nestlé India, expressed satisfaction with the results, noting significant double-digit growth in the Beverages and Confectionery sectors. He remarked, "This quarter, three out of four product categories experienced solid growth, helping us achieve record domestic sales."
- Key highlights include:
- High double-digit growth in the Powdered and Liquid Beverages segment.
- Nescafé gaining market share and attracting over 5.1 million new households into coffee consumption.
- Confectionery, primarily driven by KitKat, saw high single-digit growth rates.
Commodity Price Trends
In its outlook on commodities, Nestlé India stated that coffee prices remain firm, while cocoa prices, despite some corrections, are still elevated. The company noted stability in edible oil prices, while milk prices have shown a seasonal increase with the onset of warmer weather.
Dividend Announcement
Nestlé India’s board has proposed a final dividend of ₹10 per equity share for the fiscal year 2024-25, covering the entire issued share capital comprising 964,157,160 shares.
Business Vertical Growth Insights
The company’s results indicate that various business segments contributed positively:
- Powdered and Liquid Beverages: Major contributor with significant double-digit growth.
- Confectionery: Strong performance driven by KitKat.
- Prepared Dishes and Cooking Aids: Mid-single-digit growth, with Maggi returning to volume growth.
- Petcare: Reported its highest-ever growth since joining the Nestlé India portfolio.
E-commerce and Distribution Innovation
Nestlé India has adopted an omni-channel strategy, ensuring its products are easily accessible to consumers. The rapid growth of e-commerce, especially through Quick Commerce, now accounts for 8.5% of the company’s domestic sales.
Narayanan noted, "Our RUrban distribution points have expanded to 27,730, reaching approximately 208,500 villages across India. Our RUrban smart stores and village market initiatives have been enhanced through technology."
Significant Investment for Future Growth
The company plans to invest around ₹6,500 crore from 2020 to 2025 to bolster its production capabilities. This commitment reflects strong product demand and supports the ‘Make in India’ initiative. The establishment of a new factory in Odisha, representing the company’s 10th growth hub, will require an initial investment of about ₹900 crore.
Leadership Transition
In a strategic move, Nestlé India’s board has recommended the appointment of Manish Tiwary as Managing Director for a five-year term beginning August 1, 2025. Until then, Tiwary will serve as Managing Director (Designate), effective April 24, 2025.
In conclusion, while Nestlé India’s Q4 results indicate challenges in profitability, the overall growth in revenue and key business segments positions the company on a promising path for the future.
