Nestlé India Q2FY25 Results: Resilience Amidst Challenges
Nestlé India demonstrates resilience in Q2FY25 despite muted consumer demand. The company reports modest growth, driven by e-commerce and out-of-home channels. Innovation and sustainability remain key focus areas.
RI
by RA ALOK DAIYA SEBI Reg. INH000011468
Financial Performance Overview
Sales Growth
Total sales reached Rs 5,074.8 crore, with 1.3% overall growth. Domestic sales grew by 1.2%, showing modest market expansion.
Profitability
Profit from operations stood at 21.0% of sales. Net profit was Rs 986.4 crore, indicating stable financial health.
Shareholder Value
Earnings per share of Rs 10.23 reflect the company's ability to generate returns for investors.
E-commerce and Digital Transformation
E-commerce continues to be a growth driver, with a remarkable 38% increase. Quick Commerce fueled this expansion, particularly benefiting brands like KITKAT and NESCAFE.
1
Digital Strategy
Targeted digital communications and festive participation boosted online sales. New user acquisition remained a key focus.
2
Channel Contribution
E-commerce now contributes 8.3% to domestic sales, the highest in seven quarters.
3
Premiumization
Premium products drove growth in the digital space, aligning with evolving consumer preferences.
Brand Performance and Innovation
Five of Nestlé's top 12 brands achieved double-digit growth. The company launched over 145 new products in eight years.
1
Beverages Success
NESCAFE variants posted high double-digit growth, driven by category recruitment and premiumization.
2
Culinary Segment
MAGGI noodles and Masala-Ae-Magic showed positive volume growth. MILKMAID reported high double-digit growth.
3
Emerging Categories
Petcare business demonstrated high single-digit growth. KITKAT delivered high single-digit growth.
4
Future Pipeline
Eight new projects are in development, promising continued innovation and market expansion.
CERELAC: 50 Years of Nutrition
CERELAC celebrates its 50th year in India. The brand introduces variants with no refined sugar, aligning with health trends.
1
Product Range
21 CERELAC variants, with 14 having no refined sugar. Seven new variants launching by November 2024.
2
Manufacturing Legacy
First batch produced in Moga, Punjab in 1975. Continues production in Moga and Samalkha factories.
3
Nutrition Focus
Commitment to providing quality nutrition for infants and toddlers. Adapting to changing consumer health preferences.
Out-of-Home Business Expansion
The Out-of-Home segment shows strong double-digit growth. Nestlé India positions itself as a total solution provider.
Beverage Solutions
Offering hot and cold vending solutions. Diverse range of coffee applications for various channels.
Food Solutions
Comprehensive portfolio spanning savory and dessert culinary options. Catering to diverse channel needs.
Market Expansion
Driving reach beyond metros. Focus on new customer acquisition and portfolio transformation.
Environmental Sustainability Initiatives
Nestlé India enhances its commitment to environmental sustainability. Focus on reducing greenhouse gas emissions and addressing agricultural waste.
1
Biomass Boilers
Installation in three major factories: Nanjangud, Moga, and Sanand. Aims to mitigate GHG emissions significantly.
2
Stubble Management
Unique biomass boiler in Moga uses briquettes made from stubble. Utilizes 3-4% of stubble in Moga district.
3
Future Outlook
Continued focus on sustainable practices. Plans for further reduction in environmental impact across operations.
Global Market Expansion
Nestlé India expands its global footprint. New SKUs introduced across categories in international markets.
1
Key Markets
Expansion in Canada, Middle East, Maldives, and Papua New Guinea. Tailoring products to meet diverse market needs.
2
Product Strategy
Introduction of new SKUs across various categories. Focus on adapting to local tastes and preferences.
3
Growth Potential
Leveraging brand strength in new markets. Potential for significant revenue growth from international expansion.