The Hindu Business Line : Nestle Q1 net profit surges 47% on tax account

New Delhi, April 29 Nestle India Ltd has reported a 47.67 per cent growth in net profit at Rs 160 crore for the first quarter ended March 31, 2008. Net sales for the quarter grew more than 26 per cent to Rs 1,090 crore.

While domestic sales, which now account for 92 per cent of total net sales, grew nearly 30 per cent against the same period the corresponding year, growth in exports sales was nearly stagnant.

The Indian arm of the Swiss food major said it benefited positively “from a lower income-tax provision due to the accrual of tax holiday claim arising out of Pantnagar factory operations for the full fiscal year ended March 31, 2008. However, factoring in the tax benefit of this quarter, the net profit has grown by 38 per cent resulting in a net margin of 13.6 per cent.”

“The combination of strong mindset, clear strategic direction, focus on execution and engagement of our people has enabled us to continue to deliver strong organic growth and improve our EBIT margin. The economic environment continues to provide support to our business,” said Mr Martial Rolland, Chairman and Managing Director, Nestle India, in a statement.

The earnings before income-tax margin improved to 20.9 per cent, largely due to economies of scale, improved sales channel mix, as well as the ongoing strategic transformation process that allowed the business to mitigate higher raw materials costs, said Nestle. Raw material prices continue to pose a big challenge, said the company.

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