Due mostly to higher raw material prices, FMCG giant Nestle India Limited reported a 5% year-over-year (YoY) drop in net profit to Rs 885.4 crore for the January–March quarter (Q4) of FY25 on Thursday.
According to the company’s stock market filing, the company’s overall profitability suffered during the quarter due to escalating pressures from rising costs for essential commodities, including milk, coffee, and cocoa.
Additionally, export sales had a significant decline, down 8.65% year over year. Despite a little recovery in domestic demand, this drop in exports caused the company’s total sales growth to drop to 3.7%.
One significant obstacle was ongoing cost increases. The rising prices of coffee, chocolate, and milk, especially as summer approaches, put further strain on the company’s bottom line even while edible oil prices were steady.
Nestle India said that despite its efforts to keep up momentum in its key product categories, profitability remained squeezed.
Nestle India Chairman and Managing Director Suresh Narayanan said, “Volume growth is a strong indicator of consumer resilience and improved sentiment in a challenging macro environment.”
Narayanan said that “persistent cost inflation continued to pressure profitability,” but that ongoing investments in distribution and innovation are also contributing to the growth of market share across all categories.
Nonetheless, the company’s domestic sales increased 4.2% year over year and hit a record high of Rs 5,235 crore.
Improved consumer mood and higher volume sales throughout urban areas, particularly in the core food and beverage sectors, helped to sustain this development.
A final dividend of Rs 10 per equity share for FY25 was also announced by the firm; distributions will begin on July 24 and the record deadline is July 4.
According to the company’s filing, this is in addition to the previous interim dividends that were paid out throughout the fiscal year.
According to the FMCG giant, improved product availability, customized online packaging, and focused advertising campaigns were the main drivers of development in its e-commerce segment.
