Nestle India Ltd., a leading player in the Indian FMCG sector, reported a 6.92% year-on-year increase in net profit to ₹746.6 crore for Q1 FY25, which fell short of analyst expectations of ₹818 crore.
The Net Profit Increased by 6.92% YoY to ₹746.6 crore in Q1 FY25, missing estimates. The Revenue increased by 10.1% YoY to ₹4,610.8 crore, driven by strong domestic and export sales. Gross margin expanded due to favorable commodity prices and cost optimization initiatives.
Nestle India Share Price dropped by around 3% after the announcement of the results due to the missed profit expectations. Nestle India Share is currently trading at 2,467.75 INR dropped−73.65 (2.90%) today as on 25 Jul, 1:47 pm IST.
Reasons for Share Price Drop:
The decline in Nestle India’s share price is primarily attributed to the company missing analysts’ estimates on net profit. While the company did report growth, investors were disappointed that the figures did not meet the anticipated targets.
Analysts’ Viewpoint: Analysts believe that Nestle India’s performance, while strong, has been priced into the stock’s valuation. The miss on profit estimates has led to a short-term correction, but the long-term outlook for the company remains positive.
Company Outlook:
Despite the missed estimates, Nestle India remains optimistic about its future growth prospects. The company cited robust demand for its products, continued focus on innovation, and expansion into new categories as reasons for its optimism. It also plans to invest in expanding its production capacity and strengthening its distribution network.
Nestle India Q1 FY25 Financial Highlights –
- Total Sales of INR 4793.0 crore
- Total Sales Growth at 3.8%. Domestic Sales Growth at 4.2%.
- Profit from Operations at 21.3% of Sales
- Net Profit of INR 746.6 crore
- Earnings Per Share of INR 7.74
- Interim Dividend INR 2.75 per equity share declared on 8th July 2024
Overall, Nestle India’s Q1 FY25 results were a mixed bag. The company reported strong revenue growth and margin expansion, but the missed profit estimates caused a temporary setback in the share price. However, the company’s strong fundamentals and growth prospects suggest that it is well-positioned for continued success in the Indian market.