FMCG major Nestle India on Friday
announced its plans to invest Rs 2,600 crore over the next three to four years
to augment its manufacturing capacity in the country, terming the move as
“vindication of confidence and trust” the company has in its Indian journey.
The company, which saw a robust 10.23 per cent growth in its domestic sales in
the July-September quarter, said its production units have returned to “normal
output” post lockdown.
As per Nestle’s plan, the new
investments are aimed at expansion activities of the existing units and towards
the construction of its new upcoming unit in Sanand, Gujarat.
Meanwhile, the FMCG major — which
follows January-December financial year — posted a marginal 1.37 per cent drop
in its net profit at Rs 587.09 crore in the third quarter ended September 30,
2020.
Its net sales, however, were up 10.19
per cent at Rs 3,525.41 crore during the period under review, the company said.
Domestic sales in July-September moved
up 10.23 per cent to Rs 3,350.10 crore as against Rs 3,039.09 crore in the
year-ago period.
Nestle, which presently operates eight
production units in India, said its factories have returned to normal output
and witnessed growth driven by an improved supply situation.
“Total sales and domestic sales both
increased by 10.2 per cent driven by volume and mix,” Nestle India said in a
post-earnings statement.
Its export sales were up 9.41 per cent
to Rs 175.31 crore as against Rs 160.22 crore in the corresponding quarter a
year ago.
Commenting on the results, Nestle India
Chairman and Managing Director Suresh Narayanan said: “The quarter witnessed
growth driven by an improved supply situation, as our factories returned to
normal output.”
Nestle, which has a 108-year long
association with India and nearly six-decade-long manufacturing journey,
announced to deepen it by announcing further investments.
“As a vindication of the confidence and
trust in the Nestle journey in India, I am pleased to share that we plan to
invest Rs 2,600 crore over the next three to four years to augment our existing
manufacturing capacities, as well as towards our new under construction ‘state
of the art factory in Sanand, Gujarat,” he said.
Nestle India said its profit before tax
was up 12.40 per cent at Rs 786.50 crore over the same period a year ago.
“Tax expense for the quarter ended
September 2020 is not comparable. The cumulative effect of lower tax rate made
applicable from April 1, 2019, was adjusted fully in the quarter ended
September 2019. Net profit after tax and earnings per share are also not
comparable for the same reason,” it said.
According to Nestle, this quarter was
boosted by double-digit growth in the in-home consumption of its key brands
such as Maggi Noodles, Maggi Sauces, KitKat, Nestle Munch, Nescafe Classic and
Nescafe Sunrise.
Besides, demand in ‘Out of Home’
channels improved during the quarter but continues to be impacted due to the
overall environment.
“We continued our strong performance in
the e-commerce channels, which grew by 97 per cent and now contributes about 4
per cent of domestic sales,” he said.
Meanwhile, Nestle India in a separate
filing informed that its board in a meeting held on Friday declared an interim
dividend of Rs 135 per equity share of Rs 10 each for the year 2020 on the
entire issued, subscribed and paid-up share capital.
Nestle India board also approved the
appointment of Matthias C Lohner, as whole-time director, designated as
‘Executive Director – Technical’ of the company with effect from November 1,
2020, for a term of five years, subject to requisite approvals.
Earlier this week, its Swiss-based
parent company Nestle while announcing its July-September quarter result had
said: “India posted strong mid-single-digit growth, with good momentum in
Maggi, Nescafe and KitKat.”
The Indian market was ranked at number
13 in terms of contribution to Nestle’s global revenue in 2019.
Shares of Nestle India Ltd on Friday
settled at Rs 15,863.00 on the BSE, down 0.30 per cent from the previous close.
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