Nestle India reported an increase of 10.13% in top line sales for the Sep-20 quarter at Rs3,541.70cr. The operating profits for the quarter ended Sep-20 were up by 17.68% at Rs792.48cr while the net profits were down by 1.40% at Rs587.09cr.
This had a logical impact on the margins of the company. For the Sep-20 quarter, the operating profit margins or OPM was 145 bps higher at 22.38% while the net profit margins or NPM for the quarter was 194 bps down at 16.58% due to higher input costs.
Financial highlights for Sep-20 compared yoy and sequentially
|Particulars||Sep-20 Quarter||Growth (yoy)||Growth (qoq)|
|Key Ratios||Sep-20 Quarter||Sep-19 Quarter||Jun-20 Quarter|
|Net Profit Margin||16.58%||18.52%||15.95%|
Key takeaways from the Sep-20 quarter results
The impact on the net profit was largely on account of the higher raw material costs during the quarter. The company has recovered after a temporary sales slowdown in the Jun-20 quarter and has now bettered the pre-COVID levels of sales.
Nestle plans to consolidate on its double digit growth advantage in India by investing up to Rs2,600cr over the next four years to expand and deepen the market. Nestlé’s factories have returned to normal output in the Sep-20 quarter.
During the quarter, the double digit growth in its key brands was driven by in-home consumption. The ecommerce channel for sales in India grew by 97% in Sep-20 quarter on a yoy basis and now accounts for 4% of total sales of Nestle.