Nestle India's March quarter profit up y-o-y by 27%

26 Apr 2024 , 09:10 AM

The FMCG giant announced better-than-expected earnings for the March quarter, which cheered investors alarmed by a probe into the company for allegedly having high sugar content in its baby food. Nestle India shares increased 2.6% on April 25.

From the same quarter last year, Nestle India's standalone net profit increased by 27% to ₹934 Crore. In the March quarter, revenue for the Maggi manufacturer increased by 9% to ₹5,268 Crore.

The board recommended a final dividend of ₹8.5 per share of ₹1 face value, according to the Indian division of the multinational food company Nestle.

The stock was up 2.47% from the previous close on the National Stock Exchange, closing at ₹2,562.00.

The news that the FMCG giant adds sugar and honey to its cereal and newborn milk products in emerging nations like India but not in European markets was neutralized by the shares.

According to reports, the Food Safety and Standards Authority of India (FSSAI) has mandated an investigation into the alleged infractions. Every company that sells baby food is being investigated, including Nestle India.

When the report was revealed on April 16, the counter was trading above the closing price.

Axis Securities Chief Investment Officer Naveen Kulkarni told CNBC-TV18 that he was still bullish on Nestle India because of its distinctive product line.

Despite a number of controversies, Nestle India has consistently prevailed. According to Kulkarni, Nestle would handle the accusations, deal with the problems, and emerge stronger.

"As I am unsure of how long corrective action will take, I now maintain a neutral stance on the Cerelac issue. But if you only look at the profits, I believe the net profit is really good, especially when you contrast it with what HUL managed to come up with," market analyst Prakash Diwan stated.

Over the last half-year, Nestle India shares have increased by more than 5%, outperforming the benchmark Nifty 50, which has increased by more than 17%.

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