Nestle shares hit record high as Q3 net profit jumps 36% on-year; board approves stock split

Nestle India Limited shares hit a fresh record high on October 19 after the FMCG major reported a 36 percent surge in consolidated net profit to Rs 908 crore for the September quarter of FY24 as against Rs 668.3 crore a year ago.

Total revenue of the company stood at Rs 5,036 crore, rising 9.6 percent from Rs 4,591 crore a year ago, the FMCG major said in a regulatory filing.

According to a poll of three brokerages, Nestle India's Q3 revenue was seen at Rs 5,177.1 crore, while its net profit was expected at Rs 841.4 crore.

EBITDA rises, Margins shrink

Nestle's earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter under review came in at Rs 1,225 crore, up 1.6 percent from CNBC-TV18 poll of Rs 1,205 crore. EBITDA margin decreased by 220 basis points (bps) to 24.3 percent YoY from 22.1 percent in the corresponding quarter of last fiscal.

Domestic sales rise

Domestic sales grew 10.3 percent, on account of mix, volume, and price. "We crossed Rs 5,000 crore turnover, which has been our first in any quarter in the history of the Company and a landmark for us," said Suresh Narayanan, Chairman and Managing Director, Nestle India.

Outlook

Uneven rain and rain deficit is expected to impact production of maize, sugar, oilseeds and spices which may have an adverse impact on pricing, Nestle said in a release. Additionally, coffee continues to be volatile because of the global supply deficit. The weather during the harvest of the Indian Robusta crop may impact production.

"Upcoming winter weather may impact wheat production. Healthy milk flush is expected in winter which is expected to keep prices stable," the FMCG major said.

Nestle announces dividend

Along with its quarterly earnings, Nestle India board also declared a second interim dividend of Rs 140 per equity share of Rs 10 each for the year 2023. This dividend will paid on or from November 16, 2023, and the record date for the same has been fixed at November 1, 2023.

Nestle's 1st ever stock split

The Nestle board approved a stock split in the ratio of 1:10. The Nestle stock closed at Rs 24,080, up 3.5 percent on the National Stock Exchange.

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