Nestle India’s shares slid 2.28% to Rs 17,895.6 after the FMCG company’s net profit dipped 1.25% to Rs 594.7 crore in the March 2022 quarter compared to the March 2021 quarter.

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Net sales increased 9.7% to Rs 3950 crore in the March 2022 quarter, up from Rs 3600 crore in the March 2021 quarter. In Q1 CY22, the FMCG giant’s profit before exceptional items and taxes declined 0.69% to Rs 806.2 crore, compared to Rs 806.2 crore in Q1 CY21.

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For the quarter that ended March 2022, total sales and domestic sales both climbed by 9.7% and 10.2%, respectively.

Nestle noted that increasing commodity prices affected profitability since the cost of commodities consumed rose, particularly edible oil, milk and its derivatives, and packaging materials. 

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In Q1 CY22, Nestle’s total costs increased by about 13% year on year to Rs 3,195.9 crore, compared to Rs 3,195.9 crore in Q1 CY21. The cost of consumed raw materials grew by about 22% to Rs 1845.9 crore.

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Commenting on the results, Suresh Narayanan, chairman and MD of Nestlé India said, “I am pleased to share that in this quarter we have delivered double-digit domestic sales driven by volume and mix, which once again demonstrates the strength of our brands, consumer resonance and the resilience of the Nestlé India team and our partners. Our key brands continue to perform well with Maggi Noodles, KitKat, Nestlé Munch, Nescafé Classic and Sunrise posting creditable double-digit growth in this quarter. This growth across a range of categories was enabled by a mix of innovative campaigns, attractive consumer promotions, analytics-based consumer insights, geo-targeted distribution drives and leveraging the opportunity of festive seasons.”

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“Our endeavour is to continue on the path of penetration led volume growth with determination. Our robust performance in e-commerce continued as the channel grew by 71% and now contributes 6.3% of domestic sales. As highlighted in previous quarters, the cost of key raw and packaging materials is witnessing 10-year highs, and costs continued to surge this quarter which has impacted profit from operations. Continued inflation is likely to be a key factor in the short to medium term. We are confident of facing this turbulence with strategies of scale, efficiencies, mix and pricing all of which we will deploy judiciously” he added.

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Nestle India produces globally recognised brands such as Nescafé, Maggi, Milkybar, Kit Kat, Bar-One, Milkmaid, and Nestea, as well as items for everyday consumption and usage such as Nestlé Milk, Nestlé Slim Milk, Nestlé Dahi, and Nestlé Jeera Raita.