Nestle India is expected to report a net profit of Rs 701 crore in the April-June quarter, up 33.5 percent year-on-year and down 6.6 percent sequentially, according to average estimates of five brokerage firms. Nestle India will announce its second-quarter results on July 27.
Nestle India follows a January-to-December financial year.
Revenue is estimated to be at Rs 4,694 crore, representing a 12 percent increase year-on-year and a 3 percent growth sequentially. Operating profit or earnings before interest, taxes, depreciation and amortisation margins are forecast to be at 22.3 percent, an improvement of 58 basis points (bps) on a year-on-year basis and a 19 bps improvement sequentially.
Analysts expect volumes to grow 7 percent in the quarter.
Among the commodities affecting Nestle's business, barley, coffee and palm oil prices have eased during the quarter. Specifically, barley prices declined by 35 percent year-on-year, coffee by 1.3 percent and palm oil by 40 percent in Q2CY23. This favourable trend is beneficial for the company, as barley is a key input for its cereal products. However, sugar and milk prices have risen by 4.1 percent and 1.2 percent, respectively, which could affect dairy and confectionery margins, said analysts at Nuvama Institutional Equities.
Despite the challenges posed by increasing milk prices, brokerage firm Kotak Institutional Equities expects Nestle India to outperform other FMCG players in the quarter. Nuvama Institutional Equities expects Nestle India’s rural segment to perform well due to its expanding distribution network and continued popularity of its noodle products in rural markets.
Motilal Oswal expects growth momentum in sales to taper off compared with other quarters.
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