How do you see the Nestle stock after the Mar-22 quarter results?
Answer
Answer
Nestle India reported 10.24% higher sales revenues for the Mar-22 quarter at Rs.3981 crore. Domestic sales of Nestle India grew by 10.2% while the export sales were lower by 1% on a yoy basis for the Mar-22 quarter (which is Q1 for Nestle India). Nestle declared final dividend of Rs.65 per share taking the total dividend per share for the year to Rs.90 per share. Amidst high rural inflation and falling rural incomes, rural demand took a hit.
Nestle India Ltd
Rs in Crore
Mar-22
Mar-21
YOY
Dec-21
QOQ
Total Income (Rs cr)
₹ 3,980.70
₹ 3,610.82
10.24%
₹ 3,739.32
6.46%
EBITDA (Rs cr)
₹ 831.45
₹ 840.20
-1.04%
₹ 783.80
6.08%
Net Profit (Rs cr)
₹ 594.71
₹ 602.25
-1.25%
₹ 386.66
53.81%
Diluted EPS (Rs)
₹ 61.68
₹ 62.46
₹ 40.10
EBITDA Margins
20.89%
23.27%
20.96%
Net Margins
14.94%
16.68%
10.34%
Let us turn to the profitability. Net profits for Mar-22 quarter were lower by -1.25% to Rs594.71cr, although the profits were up by 53.81% on sequential basis. The operating profits took a hit on account of a spike in raw material costs in the quarter amidst one of the highest input inflation in recent years. The price hikes during the year could only partially neutralize the impact of higher input costs in the quarter.
The spike in price of raw materials can be largely attributed to the supply chain constraints caused by the Ukraine war, the oil sanctions on Russia and the Black Sea embargo etc. Net profit margins for the Mar-22 quarter stood at 14.94% as against 16.68% in Mar-21 quarter. The net profit margins were higher by 460 bps on a sequential basis, but this was due to the exceptional loss of Rs.236 crore on past service costs in the sequential quarter.