Maggi, Nescafe sales help Nestle clock 11% increase in net profit in Q1
Nestle India on Tuesday reported an 11.15% increase in its net profit for the quarter ended June on a year-on-year basis on the back of rise in sales of Maggi and milk and coffee products under the Nescafe brand. Lower taxes also contributed to an increase in profits. Its PAT (profit after tax) for the April-June quarter of 2020 stood at Rs 486.6 crore, against Rs 437.8crore recorded in the corresponding period of last year.
Sales of the company rose 1.96% to Rs 3,041.4 crore during the period under review, the company said in a regulatory filing.
Suresh Narayanan, Chairman and Managing Director, Nestle India, said that the past three months have witnessed volatility, uncertainty and stresses that the company had never imagined before, nor experienced.
"This led to disruptions across the value chain of the company which has impacted our results, though we have built back momentum strongly as we ended the quarter," he said.
The maker of Maggi delivered strong performance in the e-commerce channel which grew by 122% during the quarter and now contributes 3.6% to the domestic sales.
He noted that Maggi also witnessed solid growth towards the end of the quarter after initial supply constraints.
"The demand in all ‘out of home' consumption channels experienced a sharp decline due to the lockdown. However, Nestle brands enjoy trust, credibility and strength as far as ‘in home consumption' is concerned and this boosted the sales of EVERYDAY Dairy Whitener, Nestle a+ Milk, other milk based portfolios, NESCAFA% Classic and NESCAFA% Sunrise, all of which performed well this quarter," Narayanan said.
The company also reported that total sales increased by 2.0%, with domestic Sales increasing by 2.6% and export sales declining by 9.3%.
“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 in a statement.
With IANS inputs