This Consumer Durable stock which deals in the Food business and includes products like Milk Products and Nutrition, Powdered and Liquid Beverages and Confectionery, Prepared dishes and Cooking aids, and others, was in focus after its plans to increase prices to counter inflation for its products.
Price Action
With a market capitalization of Rs. 2,16,255.63 Crores, the shares of Nestle India Limited were up by 1.20 percent in the day’s trade touching a day’s high of Rs. 2,247.15 per share.
The stock reiterated from the day’s high and was trading at Rs. 2,244.95 per share which is up 1.11 percent lower from the previous closing price of Rs. 2,220.30 apiece. The stock has delivered 13 percent negative returns in the past year and has underperformed the Nifty Index.
What Happened
The stocks of Nestle India Limited is in focus after the company is considering to raise prices for its products by a slight margin to mitigate inflation in cocoa, coffee, and edible oil while maintaining their sales as per top officials from various sources.
Suresh Narayanan, the Managing Director of Nestle India said “Wherever (price increase) is absolutely essential, we will have to take some pricing action” told to Reuters and on the price hikes he said to keep them “as low as possible”. Further, he added, “price increases are not the salvation for the industry because it impacts volume growth.”
About the Company
Nestle India, a subsidiary of Nestle S.A., operates with nine manufacturing facilities, producing a range of food and beverages, including Maggi, Kit Kat, and dairy products. The company has a market leader standing at #2 Global Share as per Euromonitor.
Recent Developments
The company has recently announced its new plant in Sanand focused on building a new KitKat production line with a proposed annual capacity of 15,000 tonnes and plans to complete it within FY25 with an ~Rs. 1,100 crore investment funded through internal accruals.
Business Mix
As of the December 2024 quarter, the company earns its revenue from operations of 95.52 percent from Domestic Sales, 4.10 percent from Export Sales, and the remaining 0.36 percent from Other Operating Revenue. Further, they recognize Food segments as its sole operating segment.
Future Plans
The company expects to double the out-of-home products by 2030 due to factors like an increase in Food experience seekers from Gen Z and Millennials, Cafe driving Coffee culture, and the FS market it is expected to be more organized in the coming years.
Financial Overview
Its Revenue from operations grew by 3.91 percent year on year from Rs. 4,600 Crores in Q3FY24 to Rs. 4,780 Crores in Q3FY25. The Net Profits increased from Rs. 656 Crores to Rs. 688 Crores.
Written by Santhosh S
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