Nestlé India reported its Q2 FY25 financial results, showing moderate growth but missing market expectations in terms of revenue and margins. Despite positive net profit growth, the company’s shares fell over 3% in early trading as investors reacted to the weaker-than-expected performance.
Key Highlights for Q2 FY25:
- Revenue from Operations: ₹9,965.39 crore (up 2.7% YoY)
- Profit Before Tax: ₹2,209.5 crore (up 2.23% YoY)
- Net Profit: ₹1,646.9 crore (up 2.85% YoY)
- Operating Expenses: ₹7,934.10 crore (up 3.07% YoY)
- Earnings Per Share (EPS): ₹10.23 (up 9.65% YoY)
Market Estimates vs. Actual Performance:
- Revenue: ₹5,104 crore (missed CNBC-TV18 Poll estimate of ₹5,357 crore)
- EBITDA: ₹1,168 crore (missed CNBC-TV18 Poll estimate of ₹1,293.7 crore)
- EBITDA Margin: 22.9% (below CNBC-TV18 Poll estimate of 24.2%)
- Net Profit: ₹986 crore (exceeding CNBC-TV18 Poll estimate of ₹877 crore)
Year-over-Year (YoY) Performance:
- Revenue from Operations: ₹9,965.39 crore vs. ₹9,755.27 crore (+2.15%)
- Domestic Sales: ₹9,491.64 crore vs. ₹9,244.49 crore (+2.7%)
- Net Profit: ₹1,646.9 crore vs. ₹1,601.0 crore (+2.85%)
- Operating Expenses: ₹7,934.10 crore vs. ₹7,697.64 crore (+3.07%)
Quarter-over-Quarter (QoQ) Performance:
- Revenue from Operations: ₹9,965.39 crore vs. ₹9,639.3 crore (+3.73%)
- Profit Before Tax: ₹2,209.5 crore vs. ₹2,073.3 crore (+6.57%)
- Net Profit: ₹1,646.9 crore vs. ₹1,564.2 crore (+5.29%)
- Operating Expenses: ₹7,934.10 crore vs. ₹7,679.2 crore (+3.32%)
- EPS: ₹10.23 vs. ₹9.42 (+8.6%)
Summary of Performance:
Nestlé India demonstrated resilience in the face of rising costs, posting a 2.85% year-on-year increase in net profit, supported by strong domestic sales. However, the revenue from operations grew by only 2.7% YoY, and the company’s EBITDA margin fell below expectations at 22.9%. The decline in margins and revenue estimates led to a sell-off in Nestle India shares, contributing to a 3% drop in stock price.
Despite this, the company showed notable progress in maintaining operational efficiency and improving its Earnings Per Share (EPS) by 9.65% YoY, reflecting improved profitability and cost control measures.
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