Nestle India Ltd reported a 2.3 per cent rise in September quarter net profits at Rs 267.3 crore on higher sales.
Net sales grew 7.6 per cent during the September quarter to Rs 2,115.59 crore, mainly on account of net realisations and product mix.
The domestic sales growth was adversely impacted by the portfolio/channel optimisation and pricing for value in certain products, the company said in a statement.
Exports grew by a tenth to Rs 94.94 crore against Rs 85.95 crore in the corresponding last quarter.
Nestle said depreciation in rupee has favourably impacted the total exports growth by 11.6 per cent during the quarter.
Other operating income grew 38 per cent to Rs 8.55 crore and the company attributed this rise to export incentives.
“We have completed our close to Rs 2,500 crore manufacturing expansion and are distributing our products in four million outlets. As anticipated, 2012 is proving to be a challenging year.
“While some actions such as portfolio rationalisation, channel prioritisation and focused innovations have started to yield results, other corrective actions on demand generation in specific categories will take some time. The strength of our brands, business model and organisation gives us resilience to cope with the new reality,” said Antonio Helio Waszyk, Chairman and Managing Director, Nestle India, in a statement.
Employee benefits
Total expenses including cost of raw materials, employee benefits and depreciation grew 9.7 per cent to Rs 1753.52 crore against Rs 1598.32 crore.
The cost of raw materials was up by a tenth to Rs 900.96 crore, while the cost of employee benefits grew 17 per cent to Rs 167.14 crore.
Rise in employee cost was due to the increase in headcount to support business and company’s remuneration strategy.
The tax expenses grew 5.6 per cent to Rs 119.69 crore against Rs 113.35 crore in the corresponding last quarter.
Nestle India scrip ended lower by about one per cent to close at Rs 4,820 on the BSE on Monday.