Companies

Nestle India Q2 net profit up 11%

Our Bureau New Delhi | Updated on July 28, 2020 Published on July 28, 2020

Suresh Narayanan, CMD, Nestle India   -  Bijoy Ghosh

Nestle India on Tuesday reported a net profit of ₹486.6 crore for the quarter ended June 30, up 11.15 per cent over ₹437.79 crore recorded in the corresponding period of the previous fiscal. Revenue from operations grew 1.66 per cent to ₹3,050.48 crore for the quarter under review.

The company, which follows the January-December period as fiscal year, said total sales grew 2 per cent. While domestic sales increased 2.6 per cent, export sales declined 9.3 per cent. “Sales were adversely impacted due to the Covid-19 induced lockdown leading to production disruption across factories. Demand in out-of-home channel was severely reduced,” the company said.

The packaged food company added that net profit and earnings per share were positively impacted by lower corporate tax rates.

Suresh Narayanan, Chairman and Managing Director, Nestle India, said, “The past three months have witnessed volatility, uncertainty and stresses that we had never imagined before nor experienced. This led to disruptions across the value chain of the company that has impacted our results, though we have built back momentum strongly as we ended the quarter.”

He said the company’s eight factories have been restored almost to their pre-Covid levels of manufacturing capabilities. “While we progress each day, challenges in sales and distribution due to precautionary and well-intended measures taken by the authorities do cause disruptions,” Narayanan added.

The company said it delivered strong performance in the ‘e-commerce’ channel which grew 122 per cent in the quarter and now contributes 3.6 per cent to its domestic sales. “The demand in all ‘Out of Home’ consumption channels experienced a sharp decline due to the lockdown,” he said.

However, in-home consumption boosted sales of its coffee, dairy whitener and milk and milk-based products portfolio. “Maggi also witnessed solid growth towards the end of the quarter after initial supply constraints,” the company added.

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Published on July 28, 2020
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